Scenario: One more loan?

Test your judgment. Given Elena’s situation, which decision do you think is best for her?


Elena just completed a 2-year technical training program. She’s off to a successful start working as an independent contractor, paying off her student loan and a second loan to buy a van. She just landed a project that requires specialized equipment. She planned to rent the equipment, but the vendor has offered her a good deal to buy it instead. She’d need a 3-year loan to buy it, but she could use the equipment on future jobs, too.
Rent. Before taking on any more debt, she should make sure she can handle all her new expenses.

The consequences of your choice

See the consequences of this choice for Elena and hear what your guide has to say.


“I’m so glad I didn’t borrow more money. Even though I’m getting a lot of work, my expenses are higher than I thought they would be. If I had borrowed more money, it may have been tough to repay my other loans. To maintain a good credit history I’ve got to pay all my bills on time. Otherwise I’ll lose money in late fees and my credit rating will go down.”
Apply for the new loan and see if she gets approved. This equipment will help her make more money.

The consequences of your choice

See the consequences of this choice for Elena and hear what your guide has to say.


“What was I thinking? Between my new loan payments and other expenses, borrowing more money was probably the last thing I should’ve done! If I don’t pay my bills on time, I’ll have to pay late fees on top of everything. And my credit rating might go down. I can sell the equipment to repay the loan, but that might take some time.”
Determine the new loan payment amount. Only proceed if it fits her budget.

The consequences of your choice

See the consequences of this choice for Elena and hear what your guide has to say.


“I thought I could handle this equipment loan, but I was wrong. What I didn’t figure in were all the extra costs of running the equipment, including an hourly helper. Now I’m struggling to pay my bills on time and cutting back on things I don’t want to. The loan is for three years, but the technology will probably be outdated by next year. I wish I’d waited before borrowing more to buy now.”
Submit
Click the Next button to continue.
Remember: If you’re having trouble making loan payments, contact your lender immediately to discuss your situation and how you can work with them to repay.
Scenario: One more loan? Using credit wisely The warning signs of too much debt Interest rate affects loan cost