Credit, Loans & Debt

---

National Curriculum Alignment

Subject: Business Studies (WJEC/Eduqas GCSE framework)
Year Group: Year 9 (13-14 years)
Duration: 60 minutes
Class Size: 25 students

Curriculum references:

• KS3 Business Curriculum (National Curriculum for England):
  • Key Concept: Understand the role and implications of borrowing and lending, including credit and debt management (NC KS3 Business and Enterprise).
  • Financial Capability Link: Developing understanding of budgeting, borrowing responsibly and managing personal finance effectively.
  • WJEC/Eduqas GCSE Business Studies specification:
    • Topic: Influences on business (Personal finance and borrowing)
    • Learning outcome: Explain the different types of borrowing, the costs and impact of borrowing, including interest and APR.

---

Learning Objectives

By the end of the lesson, students will be able to:

1. Define and differentiate between credit, debit, loan, interest, and APR.
2. Identify and describe various types of borrowing and loans common to consumers and businesses.
3. Understand the financial implications and responsibilities involved in borrowing and debt repayment.
4. Use a loan repayment calculator to calculate monthly repayments and total loan costs.
5. Analyse how changing interest rates and loan terms affect repayment amounts and overall debt, informing better budgeting decisions.

---

Key Vocabulary

• Credit
• Debit
• Loan
• Interest
• APR (Annual Percentage Rate)

---

Resources

• Loan repayment calculators (online tool or downloadable app on tablets/laptops)
• Case scenario handouts (various loan types & terms)
• Whiteboard/chart paper
• Dyslexia-friendly printed glossary and scenario sheets (sans serif fonts, coloured paper background)
• Calculator (physical or digital)
• Projector/screen for modelling examples

---

Lesson Structure

1. Starter Activity (10 minutes)

Quick Brainstorm & Glossary Building

• Ask students what they know about borrowing and lending. Record all responses on the whiteboard.
• Introduce and explain key vocabulary with simple, relatable definitions. Use dyslexia-friendly handouts and highlight keywords with colours.
• Quick quiz: Match terms to definitions in pairs.

Differentiation:

• Provide sentence starters for struggling learners (e.g., “A loan is...”, “Interest means...”)
• Challenge advanced learners to think of examples from real life or news stories.

---

2. Main Activity (35 minutes)

Loan Repayment Calculator Challenge

Step 1 – Introduce the tool (5 mins):

• Model how to use the loan repayment calculator with a simple loan example on the projector.
• Demonstrate entering loan amount, interest rate (APR), and term length, then interpreting monthly repayments and total cost.

Step 2 – Group Work (30 mins):

• Divide class into 5 groups of 5.
• Each group receives a set of 3 distinct loan scenarios with differing:
  • Loan amounts (£500, £1000, £5000)
  • Interest rates (4%, 8%, 12%)
  • Loan terms (6 months, 1 year, 3 years)

Task:

• Calculate monthly repayments and total repayment cost for each loan scenario.
• Record findings on provided worksheet.
• Discuss and note how changing one factor (e.g., increasing APR or extending loan term) affects monthly payments and total interest paid.

Differentiation:

• Provide pre-filled partially completed worksheets for students who need scaffolded support.
• Encourage advanced learners to research/explain how APR includes fees and how this differs from just interest rates.

---

3. Plenary (10 minutes)

Class Discussion & Reflection

• Each group shares one key insight from their calculations.
• Facilitate discussion on responsible borrowing and consequences of debt, using prompts:
  • “Why might a longer loan term actually cost more overall?”
  • “How can understanding APR help consumers budget better?”
• Recap key vocabulary and concepts.

Assessment:

• Use a quick exit quiz: 3 multiple choice or short-answer questions to check understanding (e.g., Define APR; What increases monthly repayment?).

---

Differentiation Strategies

• For SEND/Dyslexia learners: Use coloured paper handouts, clear font (Arial/Comic Sans), chunked information, visual aids and glossaries.
• For lower ability learners: Scaffolded worksheets, sentence stems, peer support.
• For higher ability learners: Extension tasks (see below), opportunities to explain concepts in their own words.

---

Extension Activities (for advanced learners)

• Investigate and present on licensed vs. unauthorised lenders (e.g., payday loans).
• Explore how credit scores affect the interest rates offered on loans.
• Design a budgeting plan incorporating loan repayments post-purchase.

---

Dyslexia-Friendly Reading Options

• Offer printed materials on pastel backgrounds (mint green, soft blue).
• Use clear, sans serif fonts like Arial or Comic Sans in at least 14pt.
• Highlight key terms in bold and use glossaries with simple language.
• Incorporate pictorial aids or infographics illustrating loan repayment breakdowns.

---

This lesson plan promotes financial literacy through active engagement and tech integration, aligned with the National Curriculum for England and specific WJEC/Eduqas learning aims on personal finance and borrowing.