What are the implications of borrowing money?
I can explain the different types of borrowing and the dangers attached to borrowing.
- Year 9
What are the implications of borrowing money?
I can explain the different types of borrowing and the dangers attached to borrowing.
Lesson details
Key learning points
- Borrowing money through credit cards can lead to high interest rates.
- Short-term loans can quickly accumulate debt and become expensive.
- Long-term loans can result in paying more interest over time.
- Overdrafts can lead to high fees if not repaid quickly.
- Loan sharks charge extremely high interest rates and operate outside FCA protections.
Keywords
Borrow - taking money from a lender with the intention of paying it back
Interest - the extra money you have to pay when you borrow money, acts as a fee for using it
Overdraft - when you spend more money than you have from your bank account
Loan - a sum of money you receive and agree to pay back with interest
Common misconception
Borrowing money is always a dangerous thing to do.
In our lives it is sometimes necessary to borrow money, e.g., when we buy a house most people have to get a mortgage. However, this can be part of budgeting sensibly and learning to be financially responsible by always paying loans back on time.
Equipment
Content guidance
- Depiction or discussion of discriminatory behaviour
- Depiction or discussion of sensitive content
- Depiction or discussion of mental health issues
Supervision
Adult supervision required
Licence
Lesson video
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Prior knowledge starter quiz
6 Questions
Q1.Match the words to their correct definitions.
Q2.Various bank accounts serve different purposes, like accounts for spending and savings accounts for storing money.
Q3.The main types of payments we can use includes , debit cards, credit cards and digital payments.
Q4.What tasks does financial responsibility involve?
Q5.What is the focus of ethical banking?
Q6.Why is it important to avoid unnecessary debt?
Assessment exit quiz
6 Questions
Q1.What can happen if you borrow money through credit cards?
Q2.Match the words to the correct definition.
