Borrow Only With a Repayment Plan
Explain why a repayment plan must be calculated and confirmed as affordable before any borrowing decision is made — using income, expenses, and the total monthly repayment figure.
In this lesson
Borrow Only With a Repayment Plan is part of Using Credit Carefully. This preview shows how credit-foundations connects to everyday family decisions such as earning, saving, spending choices, goals, approvals, or parent-guided money conversations inside Progress Penguin.
Think about this money choice
Femi wants to borrow 20000 in local currency to buy equipment for a small business.
How it works
Before taking any loan, calculate a realistic repayment plan: how much will be repaid each month, for how long, and from which income source. If the monthly repayment is not comfortably covered by existing income after essential expenses, the loan should not be taken. Borrowing without a repayment plan creates a problem rather than solving one.
Apply it to a real decision
Real-life money moment: Femi wants to borrow 20000 in local currency for equipment. Monthly interest: 3%. Repayment period: 4 months. Monthly repayment: approximately 5370 in local currency. His monthly income: 18000 in local currency. Essential expenses: 14000 in local currency. Disposable income: 4000 in local currency. The repayment (5370 in local currency) exceeds his disposable income. He cannot afford this loan — even though he needs the equipment.
Activity preview
Choose the best money move
Use what you just learned. Choose the option you can explain.
Try one real money action
Open Tasks and submit proof for one task, or open Requests and make a deposit request. Parent approval can happen later.
Quiz preview
Borrow only with a repayment plan means:
Most important element of a responsible repayment plan: