Final answer:
When a person owes more on an item, like a car or house, than it is worth, they are said to be overextended on the loan. This means they have taken on more debt than they can afford to repay. Hence, the correct answer is option (d).
Step-by-step explanation:
When a person owes more on an item, like a car or house, than it is worth, the person is said to be overextended on the loan. This means that they have taken on more debt than they can afford to repay based on the value of the item.
For example, if someone owes $20,000 on a car that is worth only $10,000, they are overextended because the loan balance exceeds the value of the car.
Being overextended on a loan can have serious financial consequences, as it may be difficult to sell the item to repay the loan if the borrower needs to, and it may be harder to obtain future loans with a history of being overextended.