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Down payment

When buying a home or a car, you may need to pay a certain amount of money upfront to cover the gap between the purchase price and the loan amount. This is known as a down payment. It is a common practice in financial transactions and can also help you secure a better interest rate on your loan. Essentially, a down payment serves as a form of collateral and reduces the lender's risk. Therefore, it is an important consideration when making major purchases.
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