Mike, an 18 year old male chose not to go to post-secondary school, but found a job working for a local lawn care business. Mike's employer is a seasonal employer earns $8 an hour and works 40 hours per week. His employer does not provide any type of health insurance coverage. Mike has purchased a nice used truck upon graduation and currently makes payments on the vehicle. Mike has an apartment and lives with three other buddies. Mike was playing a game of pick-up basketball and injured his ankle. He has no insurance and will be unable to work for the next 6 weeks. What do we need to consider in this scenario and what are Mike's options?

Mike will not be able to pay his bills. He will not be able to work with an injured ankle. Mike will live in a cycle of poverty at this rate. Mike needs to move back home with his parents & go back to school. While he is in school he will be able to be on his parents insurance while he gets his education. Then when he gets a degree he will be better suited to take care of himself & live on his own.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan