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How do loan terms affect the cost of credit?

A. Longer loan terms have lower monthly payments and lower interest.
B. Shorter loan terms have higher monthly payments and lower overall interest.
C. Loan terms are based on your pay schedule and how often you get paychecks.
D. Loan terms only apply to loans with collateral but do not apply to those without collateral.

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Final answer:

Loan terms affect the cost of credit; shorter terms have higher monthly payments but lower overall interest, while longer terms have lower monthly payments but higher overall interest.


Explanation:

Loan terms impact the cost of credit significantly. Shorter loan terms result in higher monthly payments but lower overall interest costs, while longer loan terms lead to lower monthly payments but higher total interest expenses. The duration of loan terms plays a crucial role in determining the total cost of credit.


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