Which of the following is a disadvantage of taking a loan?

Taking a loan comes with several benefits, but one significant disadvantage is that it requires monthly repayments. This commitment can strain an individual's or a business's finances, especially if unexpected expenses arise or if income fluctuates. The obligation to make regular payments can limit financial flexibility and impact the ability to allocate funds to other necessary expenses or savings.

In contrast to the requirement of repayments, the other options highlight advantages associated with taking a loan. Improved cash flow reflects the immediate availability of funds that can be used for various purposes, such as investments or purchases. An increased credit score is often a benefit of responsibly managing a loan, as timely repayments can demonstrate creditworthiness. Lastly, flexibility in payment could refer to various options offered by lenders, such as adjusting payment schedules or amounts, which can make loan management easier compared to other financial obligations.