Reading a loan agreement
Understand why four critical agreement elements: (1) Total repayment — the full number, not just monthly, (2) Monthly payment — can you sustain this? (3) All fees — origination, late payment, prepayment penalties, (4) Default consequences — what happens if you cannot pay? These four determine true cost and risk.
In this lesson
Reading a loan agreement is part of Loan Cost Lab. This preview shows how credit-debt 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
Imagine this situation: A loan agreement shows: 'Origination fee: 3% of principal.
How it works
Four critical agreement elements: (1) Total repayment — the full number, not just monthly, (2) Monthly payment — can you sustain this? (3) All fees — origination, late payment, prepayment penalties, (4) Default consequences — what happens if you cannot pay? These four determine true cost and risk.
Apply it to a real decision
Real-life money moment: A loan agreement shows: 'Origination fee: 3% of principal.' On a 400000 in local currency loan, what is this fee and how does it affect your actual borrowing cost? The key lesson is: Origination fee: 400,000×3%=12,000.
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
Before signing a loan, check:
A loan agreement shows: 'Origination fee: 3% of principal.' On a 400000 in local currency loan, what is this fee and how does it affect your actual borrowing cost?