A secured loan should have a higher interest rate because the lender has less risk and therefore values the loan more highly.

Name: A secured loan should have a higher interest rate because the lender has less risk and therefore values the loan more highly.
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Question

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A secured loan is backed by collateral, which reduces the lender's risk. This means that the interest rate on a secured loan is usually lower than an unsecured loan because the lender has more security in the form of collateral.

A Secured Loan Should Have a Higher Interest Rate Because