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Why do some buyers pay a higher interest rate than others?

April 26, 2017Buyers Interest rate pay

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Why do some buyers pay a higher interest rate than others?

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Characteristics of the loan selected – adjustable vs. fixed rate, length of loan term, etc. – impact the APR. Lenders compete aggressively, and borrowers who shop get better prices. Weaker financial qualifications increase the risk of a borrower’s default on a loan, so lenders charge higher rates to compensate for this risk. In addition, product features such as no income verification increase the risk – and thus a loan’s price.