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Personal Borrowing (How to obtain goods (Cash, Buy goods on credit, Borrow…

- - - - Obtainthe use while paying for it
    - - Become the owner by paying the last instalment
- - - - Really need the goods
      - Cannot wait and save for it
      - Can afford to borrow
      - Have no alternatives
    - - Be creditworthy - satisfy the lender that they will repay the loan
      - Have the ability to repay - earn enough income to make repayments
      - Have a track record - have an account with the lender
      - Have collateral - have some form of security that the lender can take if the loan is not repaid
  - - - Bank Overdraft
        
        Temporary shortage of cash while waiting for wages
      - Medium Term
        
        Purchase of a car, furniture, television, school fees etc.
      - Long Term
        
        House purchase, house extension, etc.
      - Budget Account
        
        To spread certain costs over 12 months, e.g. car tax, car insurance
    - - Short Term
        
        Purchase of cars, furniture, house repairs, etc.
      - Long Term
        
        House building or purchase, etc.
    - - 0-5 years
        
        Purchase of car, furniture, household repairs, holidays, weddings, etc
    - - Legal
        
        Are licensed, obey proper lending agreements and can charge up to 39% interest
      - Illegal
        
        Are unlicensed
        
        They break the law by charging any amount of interest and use bullying tactics to enforce payment
        
        Should be avoided
- - - - APR
      - Number of instalments
      - Amount of each instalment
      - Cash price
      - Total credit
    - - Providing true and accurate information on the application form
      - Repaying the amount borrowed in full and on time
- - - - Eircom and the ESB give customers two months to pay their bill
    - - Customers can obtain up to seven weeks' free credit using there cards
    - - This is also referred to as instalment purchase or rental purchase
      - Here the consumer usually pays a deposit and then pays the remainder over a number of instalments
      - This is more expensive than the other credit methods ass interest is charged
- - - - percentage is taken of the amount owed at the start of the year
    - - Percentage is taken off the originally amount owed