Which of the following is true of consumer finance companies?
A)Consumer finance companies always charge lower rates of interest than commercial banks.
B)Consumer finance companies make large loans to low-risk borrowers.
C)Consumer finance companies offer consumer loans at the lowest interest rates.
D)Consumer finance companies offer consumer loans only for home mortgage lending.
E)Consumer finance companies make secured and unsecured (signature)loans to qualified individuals.

Question

Quizplus · Accepted Answer

Consumer finance companies offer both secured loans (where the borrower provides collateral) and unsecured loans (where the borrower does not provide collateral). While they may offer competitive interest rates, they do not always offer the lowest rates. They also typically focus on lending to higher risk borrowers who may not qualify for loans from traditional commercial banks. Consumer finance companies may also offer loans for purposes other than home mortgages.

Which of the Following Is True of Consumer Finance Companies