Borrowing | Baamboozle - Baamboozle | The Most Fun Classroom Games!

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True or false: If i fail to make a payment on my hire purchase agreement the item can be repossessed

True

Name 2 medium term sources of finance

1. Medium term loan. 2. Leasing 3. Hire Purchase

What is Hire purchase

Purchaser pays a deposit followed by an agreed number of regular instalments. Ownership passes to the buyer when last payment is made

What is an asset

Something of value that you own

What is a cooling off period

Period of time a person has to change their mind and cancel to contract

How long are short term sources of finance generally for

Up to a year

What is collateral

Something used as security for repayment of a loan. It can be sold by the lender and used to cover an unpaid debt

What is an instalment

A fixed sum of money due as one of a number of payments spread over an agreed period of time

Name 4 things needed when applying for a loan

1. Personal details. 2. Residential details. 3. Employment details. 4. Savings record. 5.Borrowing History. 6. Purpose of the loan

What is a bank overdraft

Where an individual or household is given permission by the bank to withdraw more money than in their account

What is a mortgage

Used to buy house/property

What is the cost of borrowing

Interest

What is a credit card

Given by the bank to the account holder. They operate on. A buy now pay later method

When does interest need to be paid on a credit card

If the bill is not paid after 30 days

True or false: There is no interest to be paid on credit cards

False

What does insolvent mean

Being unable to pay your debts as they fall due

True or false: The interest to be repaid on a Bank overdraft is extremely Low?

False

Explain the term credit rating

An estimate of a persons ability to pay off a loan,based on their saving & borrowing history

What is borrowing

Getting money from a person or financial institution & agreeing to pay it back at a later date

Name 2 sources of short term finance

1. Bank overdraft 2. Credit card

What does APR stand for

Annual percentage rate

What is a guarantor

A person who agrees to repay a loan for you should you be unable or unwilling to do so

How many parties are there in a Hire Purchase agreement

3

What is leasing

Involves renting an asset. Allows the person to have immediate possession and use of asset as long as they make fixed regular payments

Give 2 reasons for borrowing

1. To pay for expensive items. 2. To deal with short term deficits 3. For emergencies