What two questions should be answered before taking out a consumer loan? Explain.
List and briefly discuss the different factors to consider when shopping for a loan.
Sample Solution
1. What is the total cost of the loan, including any fees or interest? This question will help clarify the full financial impact of taking out a consumer loan, so that borrowers are aware of all costs associated with borrowing money.
2. How long will it take to repay the loan? Asking this question can allow borrowers to plan realistically for their budget and ensure that they have enough income to meet repayment obligations in a timely manner.