Methods of Borrowing
- Created by: DeniseAlex1910
- Created on: 10-01-18 01:14
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- Methods of Borrowing
- Hire Purchase
- Allows instant use of good or service but pay in installments
- Spreads cost of expensive items
- Interest may be higher than traditional loans
- Payday Loans
- Interest is very high
- Good in case of emergency
- Solves short term problems
- Personal Loans
- Allows a set amoutn of money to be borrowed and repaid in installations
- Makes planning and budgeting easy
- Not suitable for short term
- Mortgages
- Long term loan for high priced good
- Spreads cost over a long period of time
- Penalties apply to early payment
- Overdraft
- Can be paid off without penalties
- Interest is usually high
- Allows borrowing money from current account
- Credit Cards
- Pays for good and can then be repaid in one instalment or several
- More than the minimum can be payed to speed up repayment
- Encourages overspending
- Hire Purchase
- Advantage
- Definition
- Disadvantage
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