The topic of personal finance and loan selection has become increasingly prevalent in IELTS Writing Task 2, appearing frequently in recent years. Based on analysis of past exam questions, this theme often intersects with broader topics like economic responsibility, financial literacy, and consumer decision-making. Let’s examine a recent real IELTS question that exemplifies this trend.
Understanding how financial decisions impact personal loan choices
Task Analysis
Some people believe that individuals should be completely free to choose how to manage their personal finances and loans. Others think that governments should regulate personal financial decisions to protect citizens. Discuss both views and give your opinion.
This question requires candidates to:
- Examine two contrasting perspectives on financial decision-making
- Consider the role of government intervention in personal finance
- Present and justify their own viewpoint
- Provide relevant examples and supporting evidence
Sample Essay 1 (Band 8.0)
The debate over whether personal financial decisions should be left entirely to individuals or regulated by governments has become increasingly relevant in today’s complex financial landscape. While both approaches have their merits, I believe a balanced combination of personal freedom and governmental oversight is most beneficial.
Those advocating for complete financial freedom argue that individuals should have autonomy over their money and best practices for managing personal loans. They contend that people understand their financial needs best and can make appropriate decisions about loans and investments. Furthermore, this freedom promotes financial literacy and responsibility as people learn from their experiences.
However, proponents of government regulation emphasize the need to protect citizens from predatory lending practices and financial exploitation. The impact of interest rates on loans can be complex and misleading, potentially trapping uninformed borrowers in cycles of debt. Government oversight can establish fair lending practices and protect vulnerable populations from making catastrophic financial decisions.
In my view, the optimal approach combines individual freedom with prudent regulation. While people should maintain primary control over their financial choices, governments should establish protective frameworks that ensure transparency and fairness in financial markets. This balanced approach would preserve personal autonomy while safeguarding against exploitative practices.
Government oversight and personal freedom in financial decision-making
Sample Essay 2 (Band 6.5)
In modern society, there is a big discussion about who should control personal finances – individuals or governments. This essay will look at both sides and share my thoughts.
Some people think everyone should be free to manage their own money and loans. They say that people know what they need and can make good choices about borrowing money. For example, when someone wants to buy a house, they know how much they can pay back each month.
On the other hand, some believe governments should control financial decisions. They worry that some loan companies trick people with high interest rates. Also, many people don’t understand complicated financial terms and might make bad decisions.
I think both sides have good points, but governments should make some rules to help people. For example, they can stop loan companies from charging very high interest rates. But people should still be able to choose which loans they want to take.
Key Vocabulary
- predatory lending (n) /prɪˈdætəri ˈlendɪŋ/ – unfair lending practices
- financial literacy (n) /faɪˈnænʃəl ˈlɪtərəsi/ – understanding of financial concepts
- autonomy (n) /ɔːˈtɒnəmi/ – freedom to make own decisions
- regulatory framework (n) /ˈregjʊleɪtəri ˈfreɪmwɜːk/ – system of rules and guidelines
- transparency (n) /trænsˈpærənsi/ – openness and clarity in processes
Conclusion
When practicing similar topics, consider addressing these potential variations:
- Digital lending platforms vs traditional banks
- Financial education in schools
- Consumer protection in online lending
Share your practice essays in the comments section for feedback and improvement suggestions!
