6-42 Finance companies charge different rates than do commercial banks which

Question

Quizplus · Accepted Answer

Finance companies typically charge higher rates than commercial banks because they cater to riskier borrowers who may not qualify for traditional bank financing. This can also cause some finance companies to be classified as subprime lenders. Additionally, finance companies must still adhere to state usury laws which limit the amount of interest they can charge.

6-42 Finance Companies Charge Different Rates Than Do Commercial Banks