types of borrowing

Question 1

overdraft

Answer 1

allows someone to go over the amount of money they have in their account for a certain time period

Question 2

personal loan

Answer 2

borrowing a set amount of money and repaid in regular instalments with interest

Question 3

hire purchase

Answer 3

-allows someone to use an item immediately but is repaid in regular instalments
-when the final instalment is paid they own the item

Question 4

mortgage

Answer 4

a long-term loan to pay for a property, which is paid for over a long period of time

Question 5

credit card

Answer 5

allows someone to pay for goods or services however if the debt of the credit card isn’t paid back at the end of the month, then it will need to be paid back with interest

Question 6

payday loan

Answer 6

-a short-term source of finance
-can help bridge the gap between the present moment and receiving a wage