You can fold the bare wire end double to fill the terminal hole. Then solder the terminal and wire. Use shrink wrap to encase the connections. This serves two purposes, one to insulate the terminal and the other is to add support to the end of the wire so that it will be less likely to bend and break.
If the wrong-sized wire is used, or if a wire becomes broken or disconnected, this can cause an accidental short circuit which bypasses the resistance of the component. The current in the wire may become dangerously high and melt the wire or cause a fire.
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