Personal finance and debt management frequently appear in IELTS Writing Task 2, particularly in recent years with the global economic challenges. Based on analysis of past IELTS exams, questions about financial responsibility and debt reduction strategies appear in approximately 15% of tests, making it a significant topic for preparation.
The following essay question reflects a common type seen in recent IELTS exams:
Many people are struggling with personal debt due to easy access to loans and credit cards. Some suggest that banks should take more responsibility in preventing excessive borrowing. To what extent do you agree or disagree with this view?
Analysis of the Question
This question requires candidates to:
- Discuss the relationship between banking policies and personal debt
- Consider the balance of responsibility between banks and individuals
- Present a clear position with supporting arguments
- Provide relevant examples and solutions
importance of refinancing during low-rate periods
Sample Essay 1 (Band 8.0-8.5)
The prevalence of personal debt has become a significant concern in modern society, largely attributed to the accessibility of various credit options. While some argue that financial institutions should bear greater responsibility in controlling lending, I largely disagree with this viewpoint and believe that the primary responsibility lies with individual borrowers.
First and foremost, adults must be accountable for their own financial decisions. Although banks provide credit facilities, individuals ultimately choose whether to utilize these services and to what extent. Making informed choices about borrowing and understanding the implications of debt are fundamental aspects of financial literacy that every adult should possess. For instance, before taking out a loan or credit card, people should carefully evaluate their repayment capacity and consider the long-term consequences of their borrowing decisions.
Furthermore, excessive regulation of lending practices could have unintended negative consequences. If banks become overly restrictive in their lending policies, this might drive desperate borrowers toward unregulated lenders or loan sharks, potentially creating even more serious financial problems. Additionally, such restrictions could prevent responsible individuals from accessing necessary credit for legitimate purposes such as education, business development, or emergency expenses.
Nevertheless, banks do have a role to play in promoting responsible lending. This could include providing clear information about interest rates and repayment terms, offering financial education resources, and maintaining reasonable lending criteria. However, these measures should complement, rather than replace, individual responsibility.
In conclusion, while financial institutions should maintain ethical lending practices, the ultimate responsibility for managing personal debt lies with individual borrowers. The solution lies in improving financial literacy and promoting responsible borrowing habits rather than shifting accountability to banks.
Sample Essay 2 (Band 6.5-7.0)
Personal debt is becoming a big problem in many countries because people can easily get loans and credit cards. Some people think banks should control lending more strictly, but I don’t completely agree with this idea.
I think people should be responsible for their own money decisions. When someone decides to borrow money, they should think carefully about whether they can pay it back. Many people get into debt problems because they don’t plan their spending well or understand how interest works. For example, some people use credit cards for unnecessary shopping without thinking about the high interest rates.
Banks do have some responsibility to check if people can repay loans. They should look at people’s income and other debts before giving new loans. However, they cannot control how people use the money after lending it. Also, if banks are too strict, some people might not be able to get loans when they really need them, like for education or starting a business.
I think education about money is more important than strict bank rules. Schools should teach young people about managing money and understanding debt. Banks can help by giving clear information about their loans and explaining the risks of borrowing too much money.
In conclusion, while banks should be careful about lending money, people need to take main responsibility for their borrowing. The best solution is to help people understand money better so they can make good decisions about loans and credit cards.
Key Vocabulary
- prevalence (n) /ˈprev.əl.əns/ – the fact of something being very common
- financial literacy (n) /faɪˈnæn.ʃəl ˈlɪt.ər.ə.si/ – ability to understand and manage financial matters
- unregulated lenders (n) /ʌnˈreg.jʊ.leɪ.tɪd ˈlen.dəz/ – money lenders operating outside official banking systems
- loan sharks (n) /ləʊn ʃɑːks/ – illegal money lenders who charge very high interest
- accountability (n) /əˌkaʊn.təˈbɪl.ə.ti/ – responsibility for actions and decisions
- borrowing habits (n) /ˈbɒr.əʊ.ɪŋ ˈhæb.ɪts/ – patterns of behavior related to taking loans
- ethical lending (adj+n) /ˈeθ.ɪ.kəl ˈlen.dɪŋ/ – responsible and moral practices in providing loans
Financial literacy workshop teaching debt management strategies
Practice Suggestions
Consider writing essays on these related topics:
- The role of financial education in schools
- Digital banking and its impact on personal spending
- Credit card culture among young adults
- Government regulation of financial institutions
Share your practice essays in the comments section for feedback and discussion with other learners.
