Methods of Borrowing

?
View mindmap
  • 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
  • Advantage
  • Definition
  • Disadvantage

Comments

welloson

Report

Based on my experience, I can say that the choice of lending services must be approached as carefully as possible. And I advise you to read the Guide on avoiding predatory lending practices because it will be useful to any person who is thinking about taking out a loan. In fact, you need to think through your financial situation and, of course, the loan interest rates in order to be able to pay off the loan.

Similar Business resources:

See all Business resources »See all Finance resources »