Borrowing gives people the opportunity to finance their own goals: start or develop a business, get education, buy or renovate a home, and so on. A loan is an amount that a borrower receives on the condition that they repay the borrowed amount in installments or on a pre-agreed schedule in stages or in lump sum, usually with interest accrued on it. Loans are available from a variety of sources, such as a commercial bank, microfinance institution, friend, and more.


    Borrowing is a very responsible decision. While a reasonable loan can provide additional opportunities, an impulse, reckless borrowing can trigger significant financial problems. Thus, before borrowing money, it is important to accurately evaluate your own desires and abilities, together with the risks associated with the loan decision. For example, you need to assess reasonableness of borrowing for a trip, when repaying the loan instalment with your own income becomes quite complicated or the repayment takes so long that you just forget the pleasure of the trip.


    What are types and sources for loans? What are loan costs and terms? What is the process of taking a loan like? What issues are important in the loan agreement? What are borrower’s rights and responsibilities? What questions do I ask a lending institution before they lend me money so that I make reasoned decision that I will benefit from? – By asking similar questions, you will learn some of the important things about loans.


    More information on these and other issues is available on the Financial Education Portal (Text is available only in Georgian).