If you go to your bank and it grants you a lump sum loan today that requires monthly payments for a fixed period of time to repay the borrowed money,you have most likely received a ________.

Question

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A straight loan with a preset payment schedule requires monthly payments for a fixed period of time to repay the borrowed money, which is described in the scenario. A discount loan is a short-term loan that has a lower interest rate but requires the borrower to pay it back in a lump sum at maturity. A line of credit is a revolving credit facility that allows the borrower to draw funds as needed, up to a pre-approved credit limit. A compensating balance loan requires the borrower to maintain a minimum balance in their account with the lender to offset the cost of the loan. None of these options are described in the scenario.

If You Go to Your Bank and It Grants You