Question

If you are the borrower, which of the following would you prefer?

A. the loan compounded monthly

B. to personally guarantee the loan

C. a high debt service payment

D. a long amortization period

Answer 1

D a long amortization period

As a borrower I would not prefer a loan which compounds interest monthly because that will increase my total amount of interest payments. I would also not prefer to personally guarantee the loan because that will put my personal assets in danger. A high debt service payments will also not be preferred because that would again imply an additional expense. A long amortization period is preferred so that the loan can be paid over a long period of time With smaller payments.