Answer:
c) Higher rates will reduce the amount of loan you can obtain because your debt payment ratios will decrease.
Step-by-step explanation:
When interest rates increase significantly in the future, it will become more expensive for individuals and businesses to borrow money. This means that lenders will be more cautious in lending money, and will want to ensure that borrowers can afford to repay the loan.
As a result, if you are looking to borrow money, higher interest rates will reduce the amount of loan you can obtain because your debt payment ratios will decrease. Your debt payment ratios refer to the amount of debt payments you make each month compared to your income. If interest rates increase, your monthly debt payments will increase, which will reduce the amount of money you have available to repay a new loan.
Additionally, higher interest rates may also impact your financial ratios. For example, if you have a variable interest rate loan, your debt-to-income ratio may increase as your monthly payments increase. This could impact your ability to qualify for other types of loans or lines of credit in the future.
Therefore, it is important to carefully consider the impact of interest rates on your borrowing decisions and financial ratios, and to adjust your plans accordingly.