Economics: Year 10 - Methods of Borrowing
- Created by: WBAudis
- Created on: 03-12-15 12:09
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- Methods of Borrowing
- Mortgage
- A loan to finance the purchase of real estate (e.g. a house).
- A mortgage is secured on the house, which remains the property of the bank until it is fully paid off.
- Credit Card
- Cards that may be used repeatedly to buy products and services on credit to borrow money up to a prearranged limit.
- Each month, you must pay at least the minimum payment required (usually around 3-5 per cent) of the outstanding balance.
- You can pay more if you want, and this will reduce the interest you pay. Credit card interest rates are high.
- Each month, you must pay at least the minimum payment required (usually around 3-5 per cent) of the outstanding balance.
- Store Card
- Cards that may be used to buy products and services on credit from the shop that issued the card, up to a prearranged limit.
- Credit Card
- Cards that may be used repeatedly to buy products and services on credit to borrow money up to a prearranged limit.
- You can pay more if you want, and this will reduce the interest you pay. Credit card interest rates are high.
- Repayment terms are similar to credit cards.
- Personal Loan
- A loan given for personal or household use (e.g. to buy expensive household items like new furniture).
- Hire Purcahse
- Instalment plan whereby the loan company owns the item, but it becomes yours when the agreement (debt) is fully paid off.
- Overdraft
- Borrowing up to an agreed limit on a current account. Overdrafts must be paid back on demand.
- Mortgage
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