Final answer:
Fixed-rate loans can be structured in various ways, including traditional fixed-rate loans, bi-weekly fixed-rate loans, graduated payment fixed-rate loans, and interest-only fixed-rate loans.
Step-by-step explanation:
Fixed-rate loans can be structured in various ways to accommodate the borrower's needs:
- Traditional Fixed-Rate Loan: This is the most common structure, where the interest rate remains constant throughout the loan term.
- Bi-weekly Fixed-Rate Loan: With this structure, the borrower makes payments every two weeks instead of monthly, resulting in faster loan repayment and potential interest savings.
- Graduated Payment Fixed-Rate Loan: This structure starts with lower monthly payments that gradually increase over time, allowing borrowers to manage initial affordability challenges.
- Interest-Only Fixed-Rate Loan: In this structure, the borrower pays only the interest for a specified period, after which they begin making principal and interest payments.