Borrowing allows you to access funds for various purposes, but it's essential to understand the types and concepts to manage debt responsibly:
1.) Loans and Loan Repayment:
One-time Payments: Loans that require a single lump sum repayment, like short-term personal loans.
Several Regular Payments: Loans with fixed payments over time, such as Annuity and Amortization.
Multiple Debts and/or Payments: Handling multiple debts simultaneously using Equation of Values.
2.) Credit Cards:
Annual Fee: The yearly fee charged for holding the credit card.
Minimum Payment: The minimum amount you must repay each month to avoid late fees.
Finance Charge: The interest charged on outstanding balances.
Annual Percentage Rate (APR): The annualized interest rate charged on credit card balances.
Grace Period: The time between the transaction and when interest starts accruing.