Borrowers more likely to default would _____ to compensate the lender for their higher risk.
A) get an interest rate below the prime rate
B) pay an adjustable interest rate
C) pay a higher interest rate
D) pay a prime rate
E) be placed in foreclosure

Question

Quizplus · Accepted Answer

Borrowers who are perceived to be at a higher risk of defaulting, such as those with low credit scores or a history of missed payments, will typically be offered loans with higher interest rates. This is done to compensate the lender for the greater risk they are taking on by lending to a riskier borrower. Therefore, option C is the correct choice.

Borrowers More Likely to Default Would _____ to Compensate the Lender