A loan is borrowed money repaid with interest. Principal, rate and tenure define it. Ask questions and keep your copy.
Total cost = interest + fees. Late payments add more. Talk to the lender early.
Secured loans have collateral and lower rates but risk. Unsecured loans have no collateral and higher rates.
Compare total cost, fees, prepayment rules and fit with your budget.
Watch for red flags, verify lenders, limit app permissions, report harassment and borrow with a plan.
What you'll learn
Lesson 6.1
What Is a Loan?
Prakash's shop roof leaks and the rainy season is coming. He needs ₹50,000 now. His savings have only ₹10,000. What are his options?
You'll learn: The basic parts of a loan.
Borrowing for a Need: A loan is borrowed money repaid over time, usually with interest.
Three Key Words: Principal, rate and tenure define a loan.
Before You Say Yes: Ask before signing, and keep your copy.
Lesson 6.2
The Real Cost of a Loan
Rahul borrows ₹50,000. He repays ₹54,000 and pays another ₹1,000 in fees. How much did the loan REALLY cost him?
You'll learn: How to count the real cost of a loan.
Adding It Up: Interest cost = total repaid − amount borrowed.
Fees: Total cost = interest + fees.
Late Payments: Late payments cost more. Talk early.
Lesson 6.3
Secured or Unsecured?
Meenakshi needs ₹1,00,000. One bank says: 'Pledge your gold jewelry and pay a lower rate.' Another says: 'No security needed, but a higher rate.' Which is which?
You'll learn: The difference between secured and unsecured loans.
Collateral: Secured loans have collateral. Unsecured do not.
Trade-offs: Secured = lower rate but risk to the collateral. Unsecured = higher rate, nothing pledged.
Choosing: Weigh the cost, the risk and your ability to repay.
Lesson 6.4
Comparing Offers
Sunita needs ₹1,00,000 for a year. Offer A has smaller EMIs but a fee. Offer B has bigger EMIs and no fee. Which one costs less?
You'll learn: How to compare loan offers.
Two Offers: Compare total cost, not just the EMI.
What Else to Compare: Compare fees, prepayment and late charges, and ask questions.
Fit with Your Budget: Make sure the EMI fits your budget.
Lesson 6.5
Red Flags and Responsible Borrowing
Ajay's phone shows: 'Instant loan! No documents! Pay a small fee first!' Tempting... but something is off.
You'll learn: How to borrow safely and wisely.
Spotting Red Flags: Fees upfront and pressure are red flags. Check that the lender is regulated.
Protecting Your Data: Limit permissions and report harassment.
Responsible Borrowing: Plan, compare, check your budget and verify the lender.
Final challenge
Loan Smart
Prakash, Rahul, Meenakshi, Sunita and Ajay showed you how loans work. 10 quick questions!
Try a question
From lesson 6.1: What Is a Loan?
What is a loan?
A free gift
Money lent that you repay over time, usually with interest
A bank fee
Show the answer
Money lent that you repay over time, usually with interest. A loan is borrowed money you must repay.
Learn it the Yukti way
Every lesson is a short story told in scenes, with a quick question after each idea and a review at the end. Wrong answers come with a clear explanation, and Practice brings them back until they stick. Examples use Indian rupees and Indian rules, and show in your own currency in the app.
Yukti is for education only, not financial advice. It teaches general ideas and doesn't recommend specific products. Spot a mistake? Email support@yukti.finance and we'll fix it.
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