18.1 Drag and Drop – Loan Calculation Challenge

Lesson Learning Objectives:

  • Loan Basics – Explain how a loan lets you borrow money now and repay later with interest, and recognize common loan types (installment loans, credit cards, student loans).

  • Cost Drivers – Understand how the interest rate and the loan term determine monthly payments and the total amount repaid, and see why higher rates or longer terms make borrowing more expensive.

  • Risk-Based Pricing – Learn how your credit score and collateral affect the APR lenders offer, and why unsecured credit (e.g., credit cards) carries higher rates.

  • Smart Borrowing – Use loan calculators to compare options, assess whether you can afford payments, and decide when borrowing is truly necessary (e.g., emergencies, education).

Habari Muhimu ya Somo:

  • Higher Rate = Higher Cost – Even a small increase in APR can add hundreds (or thousands) to total interest.

  • Longer Term = More Interest – Stretching payments lowers the monthly bill but raises overall cost, so pay off loans as quickly as you comfortably can.

  • Pay in Full When Possible – For credit cards, paying the full balance within the grace period keeps interest at $0; paying only the minimum traps you in debt.

  • Borrow Wisely – Run the numbers with online calculators, compare rates, and ask, “Do I really need this loan, and can I handle the payments?”—your future budget depends on it.
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