Which statement is true of both mortgages and auto loans?

A. They are riskier than student loans for lenders.

B. They do not require a minimum payment.

C. They are secured loans and generally require a down payment.

D. They have higher interest rates than credit cards.

Answer:

C. They are secured loans and generally require a down payment.

Explanation:

Both mortgages (home loans) and auto loans are secured loans, meaning they are backed by collateral—the house for a mortgage and the car for an auto loan. If the borrower fails to make payments, the lender can repossess the car or foreclose on the house to recover losses. Additionally, both types of loans often require a down payment, which reduces the total loan amount and helps lenders mitigate risk. Unlike credit cards, these loans typically have lower interest rates since they are secured by an asset.