different types of borrowing

overdraft

• uesfull for short term emergencys

• flexible

• high interest/ fees

• easy to rely on

personal loan

• borrow a set amount of money usually for a spesific purpourse to be repaid in regular instalments with interest, such as a car or to make home improvements

hire purchase

• this allowes you to have use of a item immidetly but pay for it in regular installments. the item remains the property of the seller until all instalments have been made

• it may be sutible for one off purchases

mortgage

• this is a long term loan to fund the purchase of assets, normaly paid back over a long time

• it is sutible for assets that will remain in value over a long time and cannot be paid for outright

credit card

• the money you spend is actually borrowed from the card provider. Instead of getting money in your bank account you get credit on your credit card. Your lender will set you a credit limit, and you’ll be able to spend as much of it as you need before paying back some or all of your balance each month.​

payday loan

A short term source of finance that is available over a very shortperiod of time with very high amounts of interest.