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?

Question

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

Answer 1

D. An unsecured loan

An unsecured loan is a loan that is not backed by collateral, such as a car or house. Since Eliah's parents have offered to help pay back the loan next year, he can opt for an unsecured loan which does not require collateral. This type of loan is typically easier to obtain and may have a lower interest rate compared to a loan with collateral. Additionally, since Eliah will be studying abroad for a short period of time, an unsecured loan may be a more suitable option as it doesn't require the risk of losing collateral if he is unable to repay the loan.