Final answer:
The phrase that completes the diagram about penalties for failing to repay a loan is 'Seized possessions' (C), as lenders may recoup losses by taking legal action to seize assets. Imprisonment is generally not a modern legal consequence for debt, lower interest rates are an incentive, not a punishment, and job loss isn't a direct consequence of loan default.
Step-by-step explanation:
The correct phrase that completes the diagram about consequences for not repaying a loan is C. Seized possessions. This is because when loans are not repaid, lenders can take legal action to recover the value by seizing assets. Prison sentences, represented by option A, are not a typical consequence for failing to repay a loan in many jurisdictions due to protections against imprisonment for debt. Option B, Lower interest rates, would not be a consequence but rather an incentive for good payment behavior. Lastly, D. Losing a job is not a direct consequence of defaulting on a loan, although financial stress could have an impact on employment.
It's important to know that failure to repay a loan can also lead to expensive fees and a lower credit score, which can significantly impact a borrower's financial health.