Lesson 11. Credit - 3

PERSONAL LOANS

If you do not have enough money to buy an item, you might buy on credit. There are different ways of doing this such as hire purchase credit cards, store cards, bank overdrafts and personal loans.

Make sure you know the true cost of buying on credit.

The section deals with personal loans.

Personal loans.

– An amount of money borrowed from a bank of another organisation. The loan is paid back in fixed amounts usually each month.

– The fixed amount must be paid each month. You cannot pay a little less one month then a little more the following month.

– The interest rate is usually a lot less than the interest rate on a credit card.

Payment protection.

People are advised to take out insurance with their loan so that loan repayments will be made if people become ill unemployed or have an accident. Payment protection increases the cost of a loan.

Test lesson 11

• Test

Other lessons:

Lesson 1. Wages

Lesson 2. Wages-overtime
Lesson 3. Pricing your holiday
Lesson 4. Money for your holiday
Lesson 5. Mobile phones
Lesson 6. Bank accounns
Lesson 7. VAT - Value Added Tax
Lesson 8. Electricity, gas and water
Lesson 9. Credit - 1
Lesson 10. Credit - 2
Lesson 12. Which is better value?
Lesson 13. Car insurance
Lesson 14. Income tax
Lesson 15. Buying a house
Lesson 16. Council fax
Lesson 17. Old age pension