Variable-rate loans typically have rate caps that limit how much the rate can increase or decrease, making them a more stable option than if they constantly adjusted frequently. While variable-rate loans may not always be the best choice compared to fixed-rate loans, they can be beneficial in certain situations.

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Variable-Rate Loans

Question 13

Multiple Choice

Variable-rate loans

A) usually have rate caps that prevent them from varying too much.
B) always adjust every month.
C) are never a better option than fixed-rate loans.
D) All of the above

Correct Answer: