Since commercial finance companies offer loans to higher-risk customers than commercial banks, the interest rates they charge are usually ________ than rates charged by banks.

Question

Quizplus · Accepted Answer

Since commercial finance companies offer loans to higher-risk customers than commercial banks, they charge higher interest rates than banks. This is because higher-risk customers are more likely to default on their loans, leading to greater risk for the finance company. In order to compensate for this increased risk, finance companies charge higher interest rates.

Since Commercial Finance Companies Offer Loans to Higher-Risk Customers Than