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BORROW & LEND

The person that needs borrows.
The person that gives lends.

EXAMPLE # 1:
Joe needs to use a pen, but he doesn’t have one. Lisa has many pens
on her desk.
Yes. I can lend you a pen.
Lisa, can I borrow a pen?

Joe could also ask this way:

“Lisa, can you lend me a pen?”
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EXAMPLE # 2:
Joe asks to borrow Betty’s car to go to the supermarket.

Betty, can I Yes. Of course.

borrow your car?
LENDER

BORROWER
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BORROWING MONEY FROM A BANK

When a person does not have enough money to pay for something, they often
go to a bank, a credit union, or other financial institution and apply for a loan.

Some reasons for which people get loans:

• Auto Loan
• Education Loan
• Mortgage (a special name for a Loan to buy an Apartment or a House)
• Home Improvement Loan
• Business Loan

The financial institution looks carefully at the application. If it thinks you have a
good credit rating, it will offer you a loan. If you accept the loan, you agree to
pay money every month until the loan is paid off.

It is important to compare and evaluate loan offers to get the best deal. When
you meet with the loan officer, you should ask:
a. What is the length of the loan?
b. What is the interest rate?
c. What is the monthly payment?
d. What is the total interest?

the best deal = to pay the least amount possible for what you are buying
length of loan = money that you have to pay every month for a certain number
of months until the loan is paid off.
interest rate = the additional amount you need to pay the bank, in addition
to the amount of the loan.
monthly payment = the amount you need to pay the bank every month.

Before finalizing the agreement, think about your needs:

• Do I want to pay back the loan quickly?
• How much can I afford to pay each month?
• Is there a lower interest rate?