What type of loan requires a borrower to pay back in equal payments over a specified number of payments?

The correct answer is identified as a closed-end credit loan because this type of loan is structured to be repaid in fixed amounts over a predetermined timeframe. With a closed-end credit loan, the borrower receives a lump sum of money upfront and agrees to a specific repayment schedule that includes both principal and interest, leading to equal payments throughout the life of the loan. This predictability in payments allows borrowers to plan their finances more effectively since they know exactly how much they need to pay at each installment.

In contrast, flexible loans typically allow for varying payment amounts or schedules, making them distinct from the fixed repayments characteristic of closed-end loans. Open-end credit loans, such as credit cards, allow borrowers to draw against a credit limit multiple times, and payments can vary based on the balance, while variable interest loans have interest rates that can fluctuate over time, affecting payment amounts but not necessarily the repayment structure itself. These options do not reflect the specific requirement for equal payments over a defined number of payments as seen in a closed-end credit loan.