Job One Training: Borrow vs Loan -

Job One Training: Borrow vs Loan

Borrow or Loan? 

Borrowing and loaning are often confused because they both mean you take something from someone else and plan to give it back. The biggest difference between the two is “Interest.” 


When you take something from someone else with the intention of returning it. 


When you take something, money usually, from someone, an organization or a bank and must repay the amount with interest. 

Interest is the money you pay to use the loan. You may think of interest as the cost of the loan serviceWhen you repay your loan, you will have to pay back the money you were lent as well as the interest amount. 

When should borrowing happen? 
  • When your friend forgot their pen or pencil and wants to borrow yours. 
  • If your phone battery is dead, you might ask to borrow a phone to make a call or borrow a charger from a friend. 
  • If you have finished reading a good book, a friend or family member may ask to borrow it so they can read it too. 
 When is it Not OK to Borrow? 
  • If you feel uncomfortable in anyway. You do not need to borrow or let anyone else borrow your things if you do not want to. It is always your choice. 
  • If someone you do not trust asks to borrow something of yours, you do not have to let them borrow anything from you. 
  • If someone has borrowed something in the past and not returned it or returned it with damage, you can choose to not let them borrow again. 
When Should Loaning Happen? 
  • Loans generally refer to money 
  • If you are buying a house, the bank will loan you the money. Then you would pay the bank back with interest. 
  • Loans are used to pay for college tuition and repaid with interest. 
  • If you are buying a new car, you may take a loan out and then pay the bank back with interest. 
When is a Loan Bad? 
  • If you do not plan on or cannot possibly repay the loan you took. Loans must be repaid; there is no way out of a loan. 
  • If a family member or friend wants a loan from you, but you know they won’t be able to pay you back. 
  • When a stranger or someone you do not trust asks for a loan from you. 
  • There are loans that have a much higher interest rate or interest amount than other loans; These are called predatory loans or predatory lending. These loans are unfair and abusive. You deserve a fair loan. 

Activity:  Do this worksheet and email your answers to