AFIP Certification Exam

In auto financing, what is the primary difference between a secured loan and an unsecured loan?

Secured loans have lower interest rates because collateral backs the debt Unsecured loans require a co-signer while secured loans do not Secured loans are only available to prime borrowers Unsecured loans always have shorter repayment terms

Correct Answer:

Secured loans have lower interest rates because collateral backs the debt

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