Elijah has an opportunity to study abroad, but this will cost $5000 more than his regular college tuition. He wants to have a career in international finance when he graduates, so this opportunity will be particularly valuable for his career. His parents encourage him to go and tell him that they will help pay back the loan next year when they are done paying his brother’s college tuition. What kind of loan should Elijah get? explain
high apr
gov bond
secured loan
unsecured loan
Elijah should consider getting an unsecured loan for this opportunity to study abroad. An unsecured loan does not require collateral, so Elijah would not have to risk any of his personal assets. Given that this opportunity is important for his future career in international finance, it may be worth taking out a loan to pursue this opportunity.
While an unsecured loan typically has a higher annual percentage rate (APR) compared to a secured loan, it may be more suitable for Elijah in this situation because he does not have any assets to secure the loan against. Additionally, given that his parents have offered to help pay back the loan next year, Elijah may be able to manage the higher APR with their assistance.
Alternatively, Elijah could consider applying for a government bond, which typically offers lower interest rates compared to other types of loans. However, government bonds may have stricter eligibility requirements and longer processing times, so it may not be the best option for immediate financing. Ultimately, an unsecured loan seems like the most appropriate choice for Elijah in this scenario.