Why do lenders often require a down payment when credit is used to purchase a good?

It reduces risk to the lender.
It eliminates interest charges.
It reduces the cost of the financed good.
It increases the cost of financing the good.

The payments are done through a down payment reduces the risk to the lender and therefore the lender requires down payments when credit is used to purchase a good. Thus (A) is the correct option.

What is a down payment?

The amount of money that a purchaser pays on the purchasing of any expensive object. The down payment showcases a portion of the total purchasing amount.

It is made in the initial stage of purchasing. It reduces the risk of the lender and therefore, (A) is the correct option.

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Why do lenders often require a down payment when credit is used to purchase a good? It reduces risk to the lender. It eliminates interest charges. It reduces the cost of the financed good. It increases the cost of financing the good.

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What is a down payment?

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Why do lenders often require a down payment when credit is used to purchase a good?

It reduces risk to the lender.
It eliminates interest charges.
It reduces the cost of the financed good.
It increases the cost of financing the good.