Types of Borrowing

Overdraft

Allows a person to withdraw more money from a current account than is actually available, up to an agreed limit

Personal Loan

A set amount of money borrowed and repaid in regular installments with interest

Hire Purchase

Lets a person use an item immediately but pay in installments; ownership transfers only after the final payment

Mortgage

A long-term loan, usually for buying property, repaid over many years (e.g., 25 years)

Credit Card

Allows payment for goods/services with a monthly statement; balance can be paid in full or partially, with interest on unpaid amounts

Payday Loan

Short-term loan to cover expenses until the next wage is received