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Types of Borrowing - Coggle Diagram
Types of Borrowing
Overdraft
A form of short-term borrowing where a Bank and an individual agrees on a point of how far the individual can go into debt
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Personal loan
A form of medium to long-term borrowing when a bank gives an individual a bank loan which is paid back with interest
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Hire Purchases
A form of a loan where the individual agrees to pay back the price of a product in small monthly instalments
Disadvantages
If personal circumstances change, could make it harder to pay back
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Mortgages
A form of long-term borrowing where the individual agrees to pay back the price of an expensive asset in small, annual, amounts
Disadvantages
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If personal circumstances change, could face financial issues
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Credit cards
A form of short-term borrowing when an individual borrows an amount of the Bank's money, which is paid back to the Bank with interest
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Payday loan
A form of short-term borrowing when someone borrows small amount of money from a company, which is paid back with interest
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