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 likelihood that, in the near future, you will receive a raise at work? Does the loan have a prepayment penalty? What is the total cost of transaction (cost of item purchased plus cost of loan)? O What is the loan's APR? Do the loan's monthly payments fit in my budget? You're shopping for a big loan, but you have misgivings about Latasha, 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. Latasha spent most of the time emphasizing benefits of loans with balloon payments and interest-only payments. Latasha said that her loan was most likely the only one you'd be able to obtain. When you filled out the loan application, Latasha told you to leave out the smaller amounts you owe to department stores. Latasha discussed options for taking out a smaller loan, such as selling current assets to raise a bigger down payment. Latasha went over the fine print, such as late payment charges and prepayment provisions. Latasha pointed out that the APR and interest rate were different. Latasha told you that the interest rate is the only important fee to worry about and that discussing the APR is an unnecessary complication. I Latasha encouraged you to shop around. What are the characteristics of your reasons for feeling uneasy about Latasha the loan officer? Check all that apply. Feeling under pressure to make a decision The loan officer's embellishment of the facts The way the loan officer omitted pertinent information Your friend suggested you look into variable-rate loan. What questions should you ask? Check all that apply. I Can I afford the maximum possible monthly payment? - Is there a maximum rate? what is the interest rate tied to? How many points are added to the base rate? 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. U 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 Prepare a list of possible alternatives and make a random selection Arises when there are too few alternatives and you wish you had more features or options to select from