The choices I make today affect my future success.
Which choice would affect my ability negatively to
get a loan?
A Continuing my education after graduating
from high school.
B Getting a credit card that I pay off each month.
C Having a high debt ratio.
D Saving some of my earnings each month.
C Having a high debt ratio.
The choice that could potentially affect your ability negatively to get a loan is option C: Having a high debt ratio. When you have a high debt ratio, it means that you have a significant amount of debt compared to your income or assets. This can signal to lenders that you may have trouble repaying any additional loans you take on, making it more difficult for you to get approved for future loans.
To determine which choice would negatively affect your ability to get a loan, let's analyze each option:
A) Continuing your education after graduating from high school:
Continuing your education after high school generally has a positive impact on your future success. Obtaining a higher level of education can enhance your employment opportunities and earning potential. It may also demonstrate financial responsibility and commitment to lenders, which can have a positive effect on your loan applications.
B) Getting a credit card that you pay off each month:
Having a credit card and paying it off each month can actually have a positive impact on your ability to get a loan. It helps build a credit history and establishes a track record of responsible financial behavior. Lenders often consider your credit history when evaluating your loan applications, so having a good credit card payment history can improve your chances of getting approved for a loan.
C) Having a high debt ratio:
A high debt ratio can negatively affect your ability to get a loan. Lenders assess your debt-to-income ratio (DTI) when considering your loan applications. DTI is a comparison of your monthly debt payments to your monthly income. If your debt ratio is high, it indicates a significant portion of your income is already allocated to debt obligations, making it riskier for lenders to extend additional credit. This can make it harder to get approved for a loan.
D) Saving some of your earnings each month:
Saving some of your earnings each month doesn't directly impact your ability to get a loan negatively. In fact, having savings can often be seen as a positive factor by lenders. Saving money demonstrates financial stability and the ability to handle unexpected expenses, which can enhance your loan application.
In conclusion, the choice that would negatively affect your ability to get a loan is C) Having a high debt ratio. A high debt ratio may make lenders hesitant to approve your loan application, as it suggests a significant portion of your income is already tied to debt obligations. It is important to maintain a healthy debt-to-income ratio to improve your chances of getting approved for loans.