A single-payment loan is advantageous only if
A) the interest rate is less than on an installment loan.
B) funds will be available to repay the lump sum.
C) figured with discount method.
D) figured with simple interest method.
E) it is unsecured.

Question

Quizplus · Accepted Answer

A single-payment loan requires the borrower to repay the entire loan amount in one lump sum payment. This can be advantageous if the borrower will have funds available to repay the loan at the end of the loan term, such as from a bonus, tax refund, or other source. If the borrower does not have the funds to make the lump sum payment, they could incur additional fees or penalties. The interest rate and method of calculation are also important factors in determining the overall cost of the loan, but having the funds to make the payment is the most crucial factor for a single-payment loan.

A Single-Payment Loan Is Advantageous Only If