Answer in one sentence each Why do people sometimes use credit to pay for items instead of just using cash?

When applying for credit, is it preferable to receive a low interest rate or a high interest rate?

Sometimes, lenders allow or require a downpayment before they extend you the loan. What would be the advantage to the lender? What would be the advantage to the borrower?

1. People sometimes use credit to pay for items instead of just using cash because it allows them to make purchases immediately without needing to have the full amount of money upfront, and they can spread out payments over time.

2. When applying for credit, it is preferable to receive a low interest rate because it means paying less money in interest over the life of the loan, resulting in lower overall costs.

3. Sometimes, lenders allow or require a down payment before extending a loan. The advantage to the lender is that it reduces the risk of default by the borrower and provides immediate cash flow. The advantage to the borrower is that it may lower the amount of the loan needed, reduce monthly payments, or qualify them for better loan terms.