Managing my money for young adults
Managing my money for young adults

Start this free course now. Just create an account and sign in. Enrol and complete the course for a free statement of participation or digital badge if available.

Session 6: Understanding debt and how to borrow wisely

Introduction

In Session 4 you explored the first type of borrowing that many young people have direct experience of – the student loans used to finance further and higher education study.

In the video Bobby draws together the themes of the session. In this and the next session you’ll explore other types of borrowing that people use, including loans for cars and mortgages for property. You’ll look at the different types of lending institution too, including the ones to avoid!

The build-up of personal debt is a controversial subject. Some people unfortunately find they cannot afford to repay their debts – or, at least, cannot repay them on time. But for the vast majority of people, debts are manageable and the money borrowed is used to buy things that simply could not be afforded from savings.

In this session you look at what’s involved in borrowing (and repaying) money, at how interest rates work, at the financial institutions that are involved in setting rates, and at how debt can be used sensibly to support your goals and aspirations.

Download this video clip.Video player: mmmft_1_video_week6_intro.mp4
Copy this transcript to the clipboard
Print this transcript
Show transcript|Hide transcript
 
Interactive feature not available in single page view (see it in standard view).

By the end of this session, you should be able to:

  • understand who you can borrow from and what debt products are available
  • know when borrowing is sensible and when it is reckless
  • understand what determines the cost of borrowing money
  • understand the ranking of debt products in terms of the interest rate charged.

Take your learning further

Making the decision to study can be a big step, which is why you'll want a trusted University. The Open University has 50 years’ experience delivering flexible learning and 170,000 students are studying with us right now. Take a look at all Open University courses.

If you are new to University-level study, we offer two introductory routes to our qualifications. You could either choose to start with an Access module, or a module which allows you to count your previous learning towards an Open University qualification. Read our guide on Where to take your learning next for more information.

Not ready for formal University study? Then browse over 1000 free courses on OpenLearn and sign up to our newsletter to hear about new free courses as they are released.

Every year, thousands of students decide to study with The Open University. With over 120 qualifications, we’ve got the right course for you.

Request an Open University prospectus371