Answer: Variable interest rate loan
Step-by-step explanation:
Given, Sara has a loan with an interest rate of 2% now, but according to the terms and conditions, the interest rate could quadrupole after 18 months.
That means the interest rate will change after 18 months.
The term that summarize the situations would be "variable interest rate loan"
- A variable interest rate loan is defined as a loan in which the interest rate charged on the current balance fluctuates over time as market interest rates changes.
- It mostly generate more interest.