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Pretest: Personal Financial Management
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Choose the correct term from each box.
Complete the statement about consumer loans.
A
a
would be appropriate to use for the construction of your new kitchen because you have an estimate of the cost, while
would be best to use for any unplanned expenses that may come up during the remodeling process.
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Answer :

GinnyAnswer
In the context of consumer loans, it's important to match the type of loan with the specific need you have. For the construction of your new kitchen where you have a clear estimate of the cost, a **fixed-rate loan** would be appropriate. This type of loan provides stability in your monthly payments, making it easier to budget for the project. On the other hand, for unplanned expenses that may arise during the remodeling process, a **line of credit** would be more suitable. A line of credit allows you to borrow funds as needed, up to a certain limit, giving you flexibility to address unexpected costs without having to take out a lump sum loan. By choosing the right type of consumer loan based on your circumstances, you can effectively manage your finances and ensure that you have the necessary funds available for both planned and unforeseen expenses.

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