Answered

Which of the following is true about the interest rate of a Direct PLUS Loan?

A. The interest rate adjusts a bit higher every year.
B. The interest rate adjusts a bit lower every year.
C. The interest rate is lower early in the term of the loan but higher later on.
D. The interest rate is fixed.



Answer :

GinnyAnswer

Final answer:

The interest rate of a Direct PLUS Loan is fixed, providing stability and predictability to borrowers throughout the loan term.


Explanation:

The interest rate of a Direct PLUS Loan is fixed. This means that the interest rate remains constant throughout the term of the loan, providing borrowers with predictability in their repayment obligations.

Unlike adjustable-rate loans that fluctuate based on market conditions, a fixed interest rate provides stability and allows borrowers to plan their finances accordingly.

With a fixed interest rate, borrowers do not have to worry about sudden increases in their monthly payments due to interest rate adjustments.


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