Answer:
The financing option with the highest total cost over the life of the loan is typically the one with the highest interest rate, the longest loan term, or a combination of both. For example:
- Credit Cards: These often have high-interest rates (ranging from 15% to 30%), making them one of the most expensive financing options if balances are not paid in full monthly.
- Payday Loans: These short-term loans may appear manageable but have exorbitant annual percentage rates (APRs), sometimes exceeding 300%.
- Long-Term Loans with Low Payments: Loans with extended terms may lower monthly payments but significantly increase the total interest paid over time.
When considering financing options, evaluate the loan’s APR, term length, and any hidden fees to make an informed decision.