9534077
Description
Mind Map by lucy blackman, updated more than 1 year ago
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Created by lucy blackman
almost 7 years ago
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TOPIC 5 - THE COSTS OF BORROWING
5.2
- Borrowing leaves people with less left over from
their future earnings until they have repaid their
loans.
- A borrower repays what was borrowed as well as a
percentage interest charge on top of this.
- Payday loans are very expensive unlike personal loans which are cheaper
- Mortgages offer the lowest rates because they are secured on the property.
- Mortgages offer the lowest rates because they are secured on the property.
- Losing your job or being faced with a large unexpected
expenditure could affect your ability to repay a loan which is
based off your future income.
- Some people borrow more than they can afford to repay so they take out new
loans to help them repay the old ones. this could get out of control if they are
not careful or clever with it.
- HARDCORE DEBT - is the
amount of money that the
borrower will never be able to
pay off.
- This kind of debt can cause serious psychological
effects on the borrow and their relatives and
friends. Because the borrower can worry and
become stressed.
- This kind of debt can cause serious psychological
effects on the borrow and their relatives and
friends. Because the borrower can worry and
become stressed.
- If the loan is secured on an asset like a home the borrower will lose that asset if they stop making repayments.
- If the loan is unsecured then the defaulter will obtain a bad financial reputation. this will be harder to get credit again.
- If the loan is unsecured then the defaulter will obtain a bad financial reputation. this will be harder to get credit again.
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