Question

Which factor or factors listed below are internal influences on a loan’s interest rate? I. Current and prospective inflation II. Collateral offered by the borrower III. The strength of the economy a. I only b. I and III c. II only d. II and III.

Answer 1

Answer: It is C!!!!!!!!!!!!!!!

Answer 2

The internal factor affecting a loan's rate of interest is the collateral offered by the borrower. The internal factors are generally those factors that affect interest rates due to the internal activities of the banks.

Internal factors that affect interest rates of loans

These factors are the growth potential of business, creditworthiness, and collateral that the company has given for taking loan.

External factors

Similarly, the external factors of the rate in the external business environment that affect interest rates of the business are inflation, monetary policy, and economic conditions.

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