Eliah 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?
a. a loan with a high apr b. a gov bond/ treasury bill. c. a secured loan D. an unsecured loan explain
A. Elijah should consider getting a loan with a low APR (annual percentage rate) to minimize the amount of interest he will have to pay back on the loan.
B. Government bonds or treasury bills may not provide enough funds for Elijah to cover the full $5000 cost of studying abroad. These options are typically used for long-term investments rather than short-term expenses like tuition fees.
C. A secured loan involves backing the loan with collateral, such as a car or house. This may be risky for Elijah as he may not have any assets to use as collateral.
D. An unsecured loan does not require any collateral and may be a better option for Elijah in this scenario. Since his parents have offered to help pay back the loan next year, he may have the financial support needed to repay the loan without risking any assets.
In summary, Elijah should consider getting an unsecured loan with a low APR to finance his study abroad opportunity.