Finance in a minute

Imagine you really want to buy a ₹60,000 laptop, but you only have ₹20,000 saved. You could wait until you have enough money, or you could borrow the remaining amount and pay it back over time. That is the basic idea behind credit. Credit allows you to use money that you don't currently have, with an agreement to pay it back later. This can happen through things like credit cards, loans, or other forms of borrowing. So how does it work? When a bank or another lender gives you

Imagine you want to buy a ₹1 lakh laptop, but you don't have ₹1 lakh saved. Instead of waiting until you can afford it, you could take a loan from a bank and repay the money over time. That sounds simple, but borrowing ₹1 lakh does not usually mean paying back exactly ₹1 lakh. The lender charges interest, which is the cost of borrowing the money. So, what are you actually paying back? A loan usually has three important parts: Principal: the amount you originally borrowed. Int

Imagine two people apply for the same ₹5 lakh loan. Both have similar incomes, but one has a history of paying back borrowed money on time, while the other has repeatedly missed payments. A bank would probably feel more confident lending to the first person. That is where a credit score comes in. A credit score is a number that gives lenders an idea of how reliably someone has handled borrowed money in the past. It is based on information in their credit history, such as loan

Imagine you're out shopping and find a pair of shoes you really want. They cost ₹5,000, but you don't have ₹5,000 with you right now. With a credit card, you can make the purchase and pay the money back later. That sounds convenient, but a credit card isn't free money. It is a form of short-term borrowing. What happens when you use a credit card? When you make a purchase with a credit card, the card company pays the seller on your behalf. You then owe that amount to the card

We often hear people say that debt is bad. But borrowing money isn't automatically a bad financial decision. The real question is what you are borrowing for, how much you are borrowing, and whether you can afford to repay it. When can debt be useful? Some borrowing can help you achieve something that would be difficult to pay for upfront. Imagine someone takes an education loan to pay for a degree. They are taking on debt today with the expectation that the education will hel