Borrowing

Question 1

How many different types of borrowing is there?

Answer 1

• Overdraft
• Personal Loan
• Hire purchase
• Mortgage
• Credit card
• Payday loan

Question 2

What is a overdraft?

Answer 2

Short - term loan which can be used to pay bills if you are short of cash.

Question 3

What is a personal loan?

Answer 3

Can be used to pay for expensive items, such as household goods or a car. You borrow a fixed amount and pay it back with a fixed interest rate.

Question 4

What is a hire purchase?

Answer 4

Usually used to buy a car, put down a deposit, then pay monthly installments over a period of one to five years, during the payments you hire the car, when finished you own it.

Question 5

What is a Mortgage?

Answer 5

This is a loan take out to buy a property, usually last for 25 years, you pay off the mortgage in monthly installments.

Question 6

What is a Credit card?

Answer 6

You can use this to buy goods and services. You can spend up to the credit limit, at the end of the month you must pay it off.

Question 7

What is a Payday loan?

Answer 7

This is a short-term loan, usually for small amounts, often when people need cash to pay bills between paydays.