One disadvantage of financing a new car with a 15-year home equity loan is
A) the interest is tax-deductible.
B) the interest is not tax-deductible.
C) you are mismatching the asset life with the term of the loan.
D) There are no disadvantages of borrowing on a home equity loan.

Question

Quizplus · Accepted Answer

Financing a short-term asset like a car with a long-term loan such as a 15-year home equity loan results in a mismatch between the asset's useful life and the loan term. The car may only last for a few years, but the loan payments will continue much longer.

One Disadvantage of Financing a New Car with a 15-Year