Question

4. Why does non-installment credit usually come without an interest rate?

Because you need a co-signer who agrees to pay off your debts if you fail
to do so
Because non-installment credit is usually paid in the short-term
Because you have to provide a collateral to receive non-installment c
Because you need an excellent financial history in order to be approv
non-installment credit

Answer 1

Non-installment credit typically does not have an interest rate because collateral is required to secure the loan.

Step-by-step explanation:

Non-installment credit usually comes without an interest rate because you need to provide a collateral to receive non-installment credit. Collateral is an asset that you pledge to the lender as security for the loan. If you fail to repay the loan, the lender can seize and sell the collateral to recover their money. As a result, the risk to the lender is reduced, so they typically do not charge interest on non-installment credit.

For example, if you want to borrow money to buy a car, the car itself can serve as collateral. In case you default on the loan, the lender can repossess the car and sell it to cover the remaining balance.

Learn more about Non-installment credit and collateral