The longer the term of a loan, the __________ the interest rate charged for the loan; the more risk associated with a loan (from the lender's point of view), the __________ the interest rate charged for the loan.

Question

Quizplus · Accepted Answer

Longer loan terms typically involve higher interest rates due to the increased risk over time of non-repayment, and higher risk associated with a loan generally leads to higher interest rates to compensate the lender for the additional risk.

The Longer the Term of a Loan, the __________ the Interest