Introduction to Borrowing and Loans for Kids and Teens
This video explains the concept of a loan in a simple, concise way for kids and beginners. It could be used by kids & teens to learn about loans, or used as a money & personal finance resource by parents and teachers as part of a Financial Literacy course or K-12 curriculum.
Suitable for students from grade levels:
- Elementary School
- Middle School
- High School
The topics covered are:
What is a loan?
When you borrow the money, you incur a debt and have to pay the money back to the lender over time, and a little extra money – called interest.
Who can give me a loan?
Loans to individuals are typically offered by banks and credit unions.
You have to fill out a loan application giving details like your income, monthly expenses, credit score, and credit history. These factors impact the lender’s decision on the loan, including the rate of interest.
Why would I want to take a loan?
There are many reasons someone might need to take a loan. These include paying for college, buying a house, paying for a wedding, and buying a car.
How do I repay the loan?
You repay a loan through monthly payments or installments.
Over a set period of time – called the term of the loan – you pay back the money you are lent, with interest.
Are there different types of loans?
Loans can be broadly categorized into two types.
- Secured loans, like mortgage or car loans, where the lender needs the loan to be backed by an asset, like a house or car, which is called a collateral.
- Unsecured loans, like student loans and personal loans, where there is no collateral requirement from the lender.
Typically, secured loans have lower rates of interest than unsecured loans as the collateral makes them less risky for the lender.
Video Featured in the Below Financial Literacy Course for Kids & Teens
Download Transcript: Ideal for Use by Teachers in their Lesson Plan to Teach Kids & Teens
Podcast: What is a Loan
Fun, informative and concise episodes by a 10-year old, breaking down complex financial concepts in a way that kids and beginners can understand. Episodes cover personal finance topics like saving, investing, banking, credit cards, insurance, real estate, mortgage, retirement planning, 401k, stocks, bonds, income tax, and more, and are in the form of a conversation between a cowboy (a finance novice) and his friend, a stock broker. Making finance your friend, only at Easy Peasy Finance.
A little bit about me: I have been fascinated with the world of personal finance since I was 6! I love to read personal finance books, and keep myself updated on the latest by reading various personal finance magazines. My friends often ask me questions about finance because they find it complex and intimidating. That’s what inspired me to start my YouTube channel called Easy Peasy Finance when I was 8, and this podcast 2 years later.
Everything you need to know about loans: What is a Loan, Who can give you a loan, Why would you want to take a loan, How do you repay the loan, Are there different types of loans, and more.
Show notes and transcript at: https://www.easypeasyfinance.com/borrowing-loan-for-kids-beginners/