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23 March, 21:00

Why does an unsecured loan have a higher interest rate than a secured loan?

A.

The bank bears all the risk of the loan.

B.

The bank charges more for poor credit scores.

C.

The bank bases higher interest rates on market conditions.

D.

The bank raises rates unfairly for unsecured loans.

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Answers (1)
  1. 23 March, 21:17
    0
    An unsecured loan has a higher interest rate because the bank bears all the risk for the loan because if the borrower defaults on the loan, the bank has no collateral to collect to recover their money.
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