Case Study of the Week: Justifiable Loans

Jan 15, 2024

Personal Financial Literacy

You are to assume the role of a loan officer at Trust Bank. A customer has asked you to explain why certain loans are justifiable and others are not.

The customer has a job earning $50,000/year and only has rent and utilities as expenses. The customer has $20,000 in savings.

The customer has inquired about loans. The customer wants to purchase a house and would need to finance a $200,000 mortgage. The customer wants to purchase a vehicle and would need a $30,000 loan for payment. The customer is also interested in a $1,000 personal loan for a vacation.

You must explain which loans are justifiable and which are not. You must also explain which loans may require a down payment and how failing to repay loans can negatively impact the customer’s finances.


Randi Bibiano
Competitive Events Specialist

Randi Bibiano is DECA's competitive events specialist. In this role, she conceptualizes and authors role-play scenarios for the collegiate and high school division’s competitive events programs. She also manages DECA's online competitive events and serves as a liaison to volunteer efforts at DECA's educational conferences.

Discussion Questions

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Classroom Connection

Career CLuster:

Personal Financial Literacy

Instructional Area(s):

Managing Credit

Performance Indicators:

Justify the use of credit for a specific purchase
Identify examples of loans that may require down payments
Describe how failing to repay a loan can negatively impact a person’s finances and life