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Credit Sources: Where Borrowing Comes From and What It Costs
Question 1 of 7
Multiple choice
Why do secured loans typically carry lower interest rates than unsecured loans?
Secured loans are subsidized by the government
Collateral reduces the lender's risk — if you default, they can recover the asset — so they charge less for the lower risk
Secured loans have shorter repayment periods
Unsecured loans are only available to people with excellent credit
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