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. What is the reason for loan? Does the loan's payment date fit my budget? Do you need, or only want, the item being purchased? What is the total cost of transaction (cost of item purchased plus cost of loan)? Does the loan have a prepayment penalty? You're shopping for a big loan, but you have misgivings about Kate, 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. Kate pointed out that the APR and interest rate were different. kate said that her loan was most likely the only one you'd be able to obtain. Kate said that today is the only day you can secure the loan with favorable terms. Kate told you that the interest rate is the only important fee to worry about and that discussing the APR is an unnecessary complication. unnecessary complication. When you filled out the application, Kate said if you weren't sure about something on it, you could take the application home and complete it when you had the correct answers. Kate spent most of the time emphasizing benefits of loans with balloon payments and interest-only payments. Kate went over the fine print, such as late payment charges and prepayment provisions. Kate encouraged you to shop around. What are the characteristics of your reasons for feeling uneasy about Kate 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 our friend suggested you look into a variable-rate loan. What questions should you ask? Check all that apply. Is there a maximum rate? What is the interest rate tied to? What changes after a rate adjustment-the monthly payment amount or the number of monthly payments left on the loan? How often is the rate subject to change? 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. Keep it simple and select the easiest or least expensive alternative Identify your goals and a framework for evaluating any trade-offs that must be made when making your decision Prepare a list of possible alternatives and make a random selection Be prepared to ask for assistance