Personal Loan Do’s and Don’ts

Front

Which of the following is NOT a recommended practice when considering or managing a personal loan?
- Shop around to compare interest rates and repayment terms.
- Use a personal loan for necessary expenses such as debt consolidation or emergency costs.
- Borrow more than you need to cover any unexpected future expenses.
- Set up automatic payments to ensure timely repayment and potentially receive a discount.

Back

Borrow more than you need to cover any unexpected future expenses.

Front

Which of the following is NOT considered a prudent use for a personal loan? Debt consolidation, Emergency expenses, Home improvements, Paying for a vacation

Back

Paying for a vacation

Front

What should you do if you are unable to make a personal loan payment?

Back

Contact your lender to discuss forbearance or loan modification options.

Front

What does the term prudent mean in the context of using a personal loan?

Back

Careful and sensible

Front

What is debt consolidation, as mentioned in the article?

Back

Combining multiple debts into one loan with a single payment

Front

What is forbearance in the context of a personal loan?

Back

Temporarily reducing or pausing loan payments during financial hardship

Front

What is one potential advantage of setting up automatic payments for a personal loan?

Back

It may help you qualify for an interest rate discount.

Front

Why is it important to check your credit score before applying for a personal loan?

Back

To determine whether you can secure an affordable interest rate

Front

Why is it important to compare lenders and terms before taking out a personal loan?

Back

To find the lowest interest rates and favorable repayment terms

Front

If that payment remains unpaid for 30 days or more, what may the lender do?

Back

The lender may report it to the credit bureaus, which can damage your credit.