Which of the following is a disadvantage of high-interest borrowing?

Gear up for the Dave Ramsey personal finance exam. Utilize flashcards and tackle multiple-choice questions, each supplemented with hints and explanations. Prepare effectively!

High-interest borrowing can significantly increase an individual's overall debt burden. When a person borrows money at a high interest rate, the cost of repaying that loan grows much larger over time due to the interest accumulating. This can lead to a situation where one may struggle to make payments, resulting in additional fees or penalties, further compounding the debt. The heavier financial load can restrict a person's ability to save or invest in the future, often leading to a cycle of debt that is difficult to escape. Understanding this disadvantage is crucial for making informed financial decisions and managing one's finances responsibly.

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