 Smart Money Choices Borrow If you borrow money, you are taking money and agreeing to pay it back later. People might borrow money from a friend, their family, or the bank. Lend. When someone borrows money from you, they are lending it to them. Lend means to give money that will be returned or repaid later. The bank charges interest to lend money. Rate. The interest percentage a bank charges to lend you money is called a rate. If you borrow $100 and the interest rate is 8%, you will need to repay the bank $108. A loan is an amount of money plus interest that is borrowed and then paid back. Banks loan people money to buy large things, like houses or cars. Late fee. If you make your payment late, you will be charged a late fee. A late fee is the amount of money you are charged if you do not pay something on time. Transaction fee. Some banks charge their customers a fee for withdrawing or moving money from one account to another. If you use the ATM, you might have to pay a transaction fee. APR, or annual percentage rate. The annual percentage rate is a fee you pay each year for borrowing money. APR is charged on loans, mortgage loans and credit cards. Crisis. A crisis is when you have an emergency or a very serious problem. Losing your job can cause a money crisis because you cannot pay for the things you need. Cause. A cause is the reason why something happens. Having too many bills and not enough money might cause you to get frustrated. Solution. A solution is a way to fix a problem. The solution to your money problems might be to make a budget. A budget can help you plan how you will spend your money. Evaluate. When you are making financial decisions, you need to evaluate your options. Evaluate means to review or consider the situation and then decide how to solve it. Prioritize. When you prioritize things, you put them in order of importance. Top priorities are the most important things that need to be taken care of first. The end.