Financial Literacy: Credit, Debt, and Borrowing
Description
This subject develops competency in understanding credit mechanisms, responsibly utilizing various loan products, and managing debt effectively. It covers credit concepts (creditworthiness, credit assessment), different loan types available in India (personal, vehicle, education, home loans), credit cards and overdraft facilities, EMI calculations and comparisons, credit scoring systems (CIBIL), over-indebtedness risks, and alternative lending. The subject emphasizes responsible borrowing aligned with repayment capacity and strategic debt use for asset building rather than consumption.
Learning Objectives
Upon successful completion of this subject, learners will be able to: (1) understand credit mechanics and creditworthiness assessment criteria, (2) distinguish between secured and unsecured credit, (3) identify appropriate personal loan use cases, (4) evaluate personal loan terms and interest implications, (5) understand vehicle loan mechanics including down payment, margin, and amortization, (6) assess education loan benefits and eligibility, (7) understand home loan processes and mortgage mechanics, (8) strategically use credit cards while avoiding debt traps, (9) understand overdraft facilities and loans against deposits, (10) calculate equated monthly installments (EMI) accurately, (11) compare loan terms using EMI and total cost analysis, (12) understand credit scores and CIBIL rating system, (13) identify factors affecting credit scores positively and negatively, (14) assess and manage over-indebtedness risks, (15) develop debt reduction strategies, (16) understand microfinance and alternative lending options.