Question
What does a lower APR typically indicate about the the correct answer. borrower? They have a lower credit limit. They are more likely to repay their debts. They are less likely to repay their debts.
Ask by Kirk Reese. in the United States
Feb 21,2025
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Answer
A lower APR indicates that the borrower is more likely to repay their debts.
Solution
A lower APR generally indicates that the borrower is considered to be at lower risk by the lender, which typically means they are more likely to repay their debts.
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A lower APR often indicates that the borrower is viewed as a lower risk by lenders, implying they have a solid credit history and a good track record of managing debt. This often means they are more likely to repay their debts, making them an appealing choice for lending institutions who want to minimize their risk. It's like being the star pupil in class; lenders are more confident and willing to give you a higher grade, or in this case, a better interest rate! If you’ve shown that you can stick to your financial commitments, your rewards can include lower borrowing costs and better offers on loans or credit cards.
