Types of borrowing

• what is borrowing?

  taking a sum of money from a lender with the agreement of repaying it usually with interest
• types of borrowing

  • overdraft
  • mortgages
  • personal loan
  • hire purchase
  • credit cards
  • payday loan
• What is an overdraft

  borrowing extra money through your current account to cover short-term expenses
• What is a personal Loan

  Borrowing money for a specific purpose
• What is Hire purchase

  Where a customer agrees buy an asset by paying off the amount in regular instalments each month
• What is a mortgage

  A long-term loan secured against an asset which is to be paid back with interest
• What is a credit card

  When the money you spend is borrowed from a bank and is to be paid back with interest every month
• What is a payday loan

  A short-term source of finance that is available for a short period time with high amounts of interest