5. General factors to consider when shopping for a consumer loan Factors to Consider Before Taking Out a Consumer Loan You've made the decision to purchase an item that is affordable only with a loan. When shopping for a loan, there are many aspects of the loans that you should examine. Which of the following questions should be asked and answered about a specific loan proposal before accepting a lender's offer? Check all that apply. Is the loan collateralized? Does the loan have a prepayment penalty? Does the loan's payment date fit my budget? Do you need, or only want, the item being purchased? What is the reason for loan? You're shopping for a big loan, but you have misgivings about Megan, the loan officer, at an institution you just visited. What are some reasons that may have you uneasy about accepting a loan there? Check all that apply. Megan spent most of the time emphasizing benefits of loans with balloon payments and interest-only payments. Megan discussed options for taking out a smaller loan, such as selling current assets to raise a bigger down payment. Megan went over the fine print, such as late payment charges and prepayment provisions. Megan said that today is the only day you can secure the loan with favorable terms. Megan told you that the interest rate is the only important fee to worry about and that discussing the APR is an unnecessary complication. Megan volunteered pertinent information that you didn't even know enough to ask about. When you filled out the loan application, Megan told you to leave out the smaller amounts you owe to department stores. Megan encouraged you to shop around. What are the characteristics of your reasons for feeling uneasy about Megan the loan officer? Check all that apply. The way the loan officer omitted pertinent information Feeling under pressure to make a decision The loan officer's embellishment of the facts Your friend suggested you look into a variable-rate loan. What questions should you ask? Check all that apply. How many points are added to the base rate? Is there a maximum rate? How often is the rate subject to change? What is the interest rate tied to? Given the long list of relevant loan-related considerations described above, the paradox of choice often arises when attempting to make borrowing decisions. Which of the following phrases addresses the characteristics and recommended solutions for this phenomenon? Check all that apply. Arises when there are too many complicated choices, such you can become overwhelmed and make poor decisions Identify your goals and a framework for evaluating any trade-offs that must be made when making your decision Arises when there are too few alternatives and you wish you had more features or options to select from Be prepared to ask for assistance