Which is an Advantage of Obtaining Financing From a Depository Institution Like a Bank or Credit Union Instead of the Seller of a Good or Service?

Which is an Advantage of Obtaining Financing From a Depository Institution Like a Bank or Credit Union Instead of the Seller of a Good or Service?

A. Depository Institutions Are More Likely to Offer No-cost Financing.

B. Depository Institutions Charge Significantly Lower Interest Rates Than Sellers.

C. Obtaining Financing From a Depository Institution Makes It Easier to Comparison Shop. 

D. It is More Difficult to Obtain Financing From the Seller Than a Depository Institution.

The correct answer is: B. Depository institutions charge significantly lower interest rates than sellers.

Obtaining financing from depository institutions like banks or credit unions (option B) is advantageous due to significantly lower interest rates. These institutions, governed by regulations, offer loans at reduced rates compared to sellers. Their stable financial standing and minimized risk enable them to provide cost-effective borrowing options. This affordability translates into substantial savings for borrowers in interest payments. By choosing depository institutions, individuals and businesses can access financing at a more reasonable cost, making it a preferable choice over higher-interest options from sellers.