Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
GAMEY Project: Gamified Approach to Money Education for Youth
MODULE 7: Banking (Credit, Loans, Mortgage)
Let's go!
Contents
- Introduction
- What will you learn
- Understanding banks & financial institutions
- Credit and loans
- When & why to borrow
- Mortgages explained
- Credit scores
- Risks & red flags
- Wrap-up
Continue
Module goal
This module is designed to equip you with the basic knowledge and critical thinking skills to navigate banking, borrowing and mortgage systems. It builds practical understanding of credit and loans, fosters responsible financial decision-making and challenges you can apply your knowledge through simulations and mini-games based on real-life choices.
Continue
What will you learn?
Knowledge By exploring this module, learners will learn more about how to:
- Understand the role of financial institutions and common banking products
- Identify types of credit and loans and explain associated terms
- Describe how mortgages work and calculate basic repayment scenarios
Continue
What will you learn?
Attitudes Going through this module will help you to:
- Develop a critical attitude toward borrowing and recognize risky or unethical lending practices
- Build awareness of responsible financial behavior and long-term planning
- Show caution and inquiry when selecting loan offers or using credit
Continue
What will you learn?
Skills By the end of this module, you will be able to
- Compare and evaluate loan offers based on realistic conditions
- Calculate repayments based on interest and time
- Apply decision-making skills to simulations involving loans, mortgages, and credit risks
Continue
Introduction
Continue
Continue
Learning objectives
In this module, we will learn how to:- Understand what banks do and how credit works
- Compare loan options and calculate repayments
- Explore how mortgages work
- Think critically before borrowing
- Learn how to spot risky or unfair lending
- Practice smart decision-making in real-life borrowing scenarios
Which of these topics do you feel confident about already? Which ones are new or confusing?
Continue
Understanding banks & financial institutions
Continue
What do banks do?
Banks aren’t just where your money sits. They are key players in our economy. When you put money in the bank (deposit), it’s not just sitting there. The bank uses part of it to offer loans to people or businesses who need money. In return, banks charge interest on loans and may also pay interest on savings. This is how they make money.
Continue
Main functions of banks
Help you save and grow money (interest, savings plans)
Lend money to individuals and businesses (loans, mortgages, credit cards)
Offer digital tools (mobile banking, budgeting apps)
Keep your money safe (deposits, savings accounts)
Continue
Types of financial institutions
Traditional banks
Credit unions
Online banks
Payday lenders
Continue
Glossary cards
Click or flip each card to learn about these common financial terms. Try to guess what each one means before revealing the answer!
Credit union
A nonprofit alternative to banks
Money you add to a bank account
Money you borrow and must repay
Extra money paid when borrowing
Deposit
Loan
Interest
Spending more than you have in your account
Long-term loan to buy a home
The original amount you borrow
Overdraft
Mortgage
Principal
Continue
Credit and loans
Continue
What is credit?
Credit means borrowing money that you promise to pay back later — often with interest.It allows people to buy now and pay over time. But credit is not free — you pay extra for the convenience.That’s why it’s important to understand how it works before using it.
Continue
Types of loans
Continue
Key terms to know
Interest
Principal
Repayment term
APR (Annual Percentage Rate)
The extra cost you pay for borrowing
The original amount you borrow
How long you have to pay it back
Total cost of the loan over a year (includes fees)
Continue
"If Rob borrows €1,000 at 10% APR for 1 year, he pays about €100 in interest. If APR is 20%, he pays €200 — big difference!”
Continue
Rob needs to borrow €8,000 to buy a used car. Three banks offer different loan terms. Help Rob figure out which is best.
Help Rob choose the best loan
Which one is cheapest offer overall? Which one has the lowest monthly payment? Which one helps Rob pay off his debt fastest? Which loan is the best if Rob wants to save money in total? Which one would be best if Rob had a low monthly income?
BANK 1
BANK 2
Use the table to compare all three offers. Answer the folowing questions...
BANK 3
Continue
When & why to borrow
Continue
Why do people borrow money?
Borrowing money is not always bad. In fact, some of the biggest life steps - like buying a house or going to university, require borrowing. The key is to borrow smart - for things that add value to your future.
Continue
Expensive vacationDesigner clothesNewest phone upgradeConcert tickets
Education (student loans)Buying a home (mortgage)Starting a small businessCar to get to work
Risky reasons to borrow
Good reasons to borrow
Continue
Why do you think some reasons are smarter than others?
Borrowing & budgeting
Rule of thumb
Never borrow more than you can pay back without stress.
Before borrowing, ask
Can I afford to repay monthly?
Plan ahead -
unexpected costs can happen!
Continue
Read both scenarios carefully.Decide: “Should Rob borrow in A or B?”
Scenario A
Rob wants to borrow €3,000 to buy a used car so he can commute to his new job. The job pays well and is long-term.
Scenario B
Rob wants to borrow €5,000 to go on a holiday abroad with friends for 2 weeks.
Continue
•Which one is more responsible? Why?• What could be the consequences of borrowing for a trip?• What alternatives could Rob consider in both scenarios?
Continue
Wants vs. Needs - What’s the difference?
When it comes to borrowing money, one key question to ask is: “Is this a want or a need?” Needs are essential — things you can’t live or work without.Wants are things you’d like to have, but you can live without them.
Continue
Needs
Wants
Examples
Examples
• A place to live• Basic food and clothing• Transport to work or school• Internet for school/work• Medical care
• A trip abroad• Newest smartphone• Eating out often• Fashion brands• Concert tickets
Reflect
"Is borrowing for this really necessary?"→ Will it help your future, or is it just something fun for now?
Continue
Continue
Continue
Key takeaways
• Borrowing for personal enjoyment isn’t always wrong, but it can become a problem if it creates unnecessary debt.• Think long-term. Is it a want or a need? Will it help your future?
Continue
Mortgages explained
Continue
Understand mortgage
What is a mortgage? A mortgage is a special kind of loan you take from a bank or lender to help buy a home. Since houses cost a lot, most people can’t pay the full price upfront. So, they borrow money and agree to repay it monthly over many years.
Continue
How it works?
You pay part of the home price upfront - this is called a down payment. 🏠 Example: If the apartment costs €120,000 and you pay €20,000 from savings, the mortgage will cover the remaining €100,000. You choose how long to pay it back. That’s called the repayment period (e.g., 20 or 30 years). Longer periods = smaller monthly payments, but more total interest. The bank charges interest – a fee for borrowing the money. It’s added to your payments.
Continue
Interest and time
Even if the interest rate seems small (like 2.5%), over 20–30 years, you might pay tens of thousands in interest. That’s why choosing the right mortgage length and rate is super important!
Variable interest rate can change depending on the economy. ⚠️ Might go up or down — can be riskier but cheaper at first.
Fixed interest rate stays the same the whole time.✔️ Safer and predictable.
Continue
Rob’s first apartment
Please, fill in the blanks:
Continue
Rob needs to make sure the monthly mortgage payment cost fits into his €1,800 income, and he has money left for food, bills and savings!
Continue
Key takeaways
Mortgages are big, long-term decisions. Always ask yourself:• Can I afford the monthly payment?• What happens if costs go up?• What’s better for my future — short-term comfort or long-term savings?
Continue
Credit scores
Continue
What is a credit score?
A credit score is like a school grade for how well you manage money. Banks use it to decide if they can trust you with a loan or credit card. Higher score = better loan offers and lower interestLow score = might be denied or pay more
Continue
How is it calculated?
Types of credit used
Payment history
New credits
Amount of debt
Length of credit history
Do you pay your bills on time?
How much money do you already owe?
Too many new loans in a short time = risk.
How long you’ve had credit accounts.
A mix (credit card, loan, etc.)
Continue
Why does it matter?
Sign an apartment lease?
Some landlords can check your credit history!
Want a car loan?
Your score decides if you qualify.
Want a work contract?
Companies may check your credit.
Continue
Credit score Myths & Facts
❌ False
✅ True
💳 “You only need a credit score when you’re older.”
🏦 “A good credit score helps you get better loan deals.”
You may need it as soon as you get your first phone contract or rent.
Lenders trust you more and offer better interest rates.
❌ False
❌ False
📉 “Missing one payment won’t hurt your score.”
🔄 “Checking your credit score often will lower it.”
✅ True
Even one late payment can affect your score significantly.
Checking your own score is safe and does not affect it.
💼 “You build credit by having different kinds of credit.”
Credit mix is part of the score calculation.
Continue
Higher scores get better loan deals; low scores may mean denial or higher costs.
A credit score shows how well you manage money and helps lenders decide on loans.
Key takeaways
It’s based on payment history, debt amount, credit length, credit types, and new credit.
Continue
Risks & red flags
Continue
Recognizing dangerous lending practices
Not all loans are safe. Some lenders use tricks or pressure to make people borrow money they may not understand or can't afford. Borrowing is a tool — but just like any tool, it can be dangerous if misused. Here are some things to have in mind...
Continue
Over-indebtednessWhen someone borrows too much and can’t keep up with payments. This can lead to stress, unpaid bills, or losing important things like a home.
Predatory lending Some lenders take advantage of people by offering loans with unfair rules, huge interest, or hidden fees.
Loan scams These are fake or illegal offers that look real but are designed to steal your money or personal info.
Continue
Dangerous vs. Safe borrowing
it probably is.
Always ask questions and read everything carefully.
If it seems too good to be true,
Continue
Rob gets 3 loan offers
Rob needs €1,000 for car repairs so he can keep going to work. He receives 3 loan offers. Can you help him decide which one is best — and which to avoid?
Please, choose:• The safest offer • The unclear offer • The risky/predatory one Discussion questions: • What made you choose that? • What would you do if someone pushed you to sign quickly?
Continue
Key takeaways
Borrowing money is a responsible choice. Before making it, always ask yourself:• Do I understand how much I’ll repay?• Do I trust the source? • Is this affordable for me?
Continue
Wrap-up
Continue
What did we learn?
- Borrowing isn't bad — if done wisely. We learned when it makes sense and when it doesn’t.
- Banks and financial institutions play a key role in lending — but not all lenders are safe.
- We now know how to compare loan offers, understand interest rates, and spot hidden costs.
- Credit scores matter! They impact what you can borrow and how much it costs.
- We explored mortgages, one of the biggest financial decisions many people make.
- We practiced spotting the difference between needs vs. wants — and how that affects borrowing.
- We learned how to avoid risky loans and scams by reading the fine print and asking questions.
- Most importantly: We now have tools to think critically before signing any loan agreement.
Continue
Let's think back...
💭 What’s one important thing you learned about borrowing money?🧠 Before taking a loan, what should you always check?📊 Why do interest rates and loan terms (time) matter so much?🚩 What are some signs that a loan might be risky or unfair?🤔 How can you tell the difference between a “want” and a “need”?🖊️ What would YOU do before signing a credit or loan agreement?
Continue
Glossary
Continue
Glossary cards
Click or flip each card to assess your knowledge on common financial terms.
The total yearly cost of borrowing money, including both interest and any additional fees.
A number that shows how reliable you are at managing money and repaying loans.
An interest rate that stays the same for the entire loan term, so payments are predictable.
APR (Annual Percentage Rate)
The period of time you agree to pay back a loan or mortgage.
Repayment term
Fixed interest rate
Credit score
Planning how to spend and save your money so you can afford your needs and avoid debt.
An interest rate that can go up or down depending on the economy or market changes.
The amount of money you pay upfront when buying something expensive, such as a house.
Down payment
Variable interest rate
Budgeting
Continue
Glossary cards
Click or flip each card to assess your knowledge on common financial terms.
Unfair or deceptive lending that traps people in expensive debt with very high interest or hidden fees.
A way to decide what’s essential (needs) and what’s optional (wants) before borrowing.
When someone borrows too much and can no longer afford repayments.
A fake loan offer designed to steal personal information or money.
Needs vs. Wants
Over-Indebtedness
Predatory lending
Loan scam
A legitimate loan with clear terms, fair interest, and realistic repayment conditions.
A loan that has unclear rules, very high costs, or pressure to sign quickly.
A person or institution that gives money to be repaid later, usually with interest.
Lender
Risky loan
Safe loan
Continue
References
- European Banking Authority. (2021). Financial literacy and consumer protection. https://www.eba.europa.eu
- OECD. (2020). OECD/INFE 2020 International Survey of Adult Financial Literacy. https://www.oecd.org
- Investopedia. (n.d.). Credit and loans explained. https://www.investopedia.com/loans
- FINRA. (2022). Understanding credit scores and borrowing basics. https://www.finra.org/investors
Continue
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
Thank you!
Start
Example
A flashy online ad promises “Instant Cash – No Questions Asked!” Rob applies and gets €500, but the lender wants €100 every week for 12 weeks. The total cost? More than double the loan!
Example
Peter gets a message saying he’s pre-approved for a €5,000 loan. But before receiving the money, he's told to pay a “processing fee” upfront. He sends the money—then hears nothing back. It was fake.
Example
Lina took out a loan for a new phone, then used a credit card for clothes and borrowed again for a trip. Now, her monthly payments are more than half her income. She’s stressed and falling behind on bills.
7. GAMEY Module 7 Banking
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Transcript
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
GAMEY Project: Gamified Approach to Money Education for Youth
MODULE 7: Banking (Credit, Loans, Mortgage)
Let's go!
Contents
Continue
Module goal
This module is designed to equip you with the basic knowledge and critical thinking skills to navigate banking, borrowing and mortgage systems. It builds practical understanding of credit and loans, fosters responsible financial decision-making and challenges you can apply your knowledge through simulations and mini-games based on real-life choices.
Continue
What will you learn?
Knowledge By exploring this module, learners will learn more about how to:
Continue
What will you learn?
Attitudes Going through this module will help you to:
Continue
What will you learn?
Skills By the end of this module, you will be able to
Continue
Introduction
Continue
Continue
Learning objectives
In this module, we will learn how to:
- Understand what banks do and how credit works
- Compare loan options and calculate repayments
- Explore how mortgages work
- Think critically before borrowing
- Learn how to spot risky or unfair lending
- Practice smart decision-making in real-life borrowing scenarios
Which of these topics do you feel confident about already? Which ones are new or confusing?Continue
Understanding banks & financial institutions
Continue
What do banks do?
Banks aren’t just where your money sits. They are key players in our economy. When you put money in the bank (deposit), it’s not just sitting there. The bank uses part of it to offer loans to people or businesses who need money. In return, banks charge interest on loans and may also pay interest on savings. This is how they make money.
Continue
Main functions of banks
Help you save and grow money (interest, savings plans)
Lend money to individuals and businesses (loans, mortgages, credit cards)
Offer digital tools (mobile banking, budgeting apps)
Keep your money safe (deposits, savings accounts)
Continue
Types of financial institutions
Traditional banks
Credit unions
Online banks
Payday lenders
Continue
Glossary cards
Click or flip each card to learn about these common financial terms. Try to guess what each one means before revealing the answer!
Credit union
A nonprofit alternative to banks
Money you add to a bank account
Money you borrow and must repay
Extra money paid when borrowing
Deposit
Loan
Interest
Spending more than you have in your account
Long-term loan to buy a home
The original amount you borrow
Overdraft
Mortgage
Principal
Continue
Credit and loans
Continue
What is credit?
Credit means borrowing money that you promise to pay back later — often with interest.It allows people to buy now and pay over time. But credit is not free — you pay extra for the convenience.That’s why it’s important to understand how it works before using it.
Continue
Types of loans
Continue
Key terms to know
Interest
Principal
Repayment term
APR (Annual Percentage Rate)
The extra cost you pay for borrowing
The original amount you borrow
How long you have to pay it back
Total cost of the loan over a year (includes fees)
Continue
"If Rob borrows €1,000 at 10% APR for 1 year, he pays about €100 in interest. If APR is 20%, he pays €200 — big difference!”
Continue
Rob needs to borrow €8,000 to buy a used car. Three banks offer different loan terms. Help Rob figure out which is best.
Help Rob choose the best loan
Which one is cheapest offer overall? Which one has the lowest monthly payment? Which one helps Rob pay off his debt fastest? Which loan is the best if Rob wants to save money in total? Which one would be best if Rob had a low monthly income?
BANK 1
BANK 2
Use the table to compare all three offers. Answer the folowing questions...
BANK 3
Continue
When & why to borrow
Continue
Why do people borrow money?
Borrowing money is not always bad. In fact, some of the biggest life steps - like buying a house or going to university, require borrowing. The key is to borrow smart - for things that add value to your future.
Continue
Expensive vacationDesigner clothesNewest phone upgradeConcert tickets
Education (student loans)Buying a home (mortgage)Starting a small businessCar to get to work
Risky reasons to borrow
Good reasons to borrow
Continue
Why do you think some reasons are smarter than others?
Borrowing & budgeting
Rule of thumb
Never borrow more than you can pay back without stress.
Before borrowing, ask
Can I afford to repay monthly?
Plan ahead -
unexpected costs can happen!
Continue
Read both scenarios carefully.Decide: “Should Rob borrow in A or B?”
Scenario A
Rob wants to borrow €3,000 to buy a used car so he can commute to his new job. The job pays well and is long-term.
Scenario B
Rob wants to borrow €5,000 to go on a holiday abroad with friends for 2 weeks.
Continue
•Which one is more responsible? Why?• What could be the consequences of borrowing for a trip?• What alternatives could Rob consider in both scenarios?
Continue
Wants vs. Needs - What’s the difference?
When it comes to borrowing money, one key question to ask is: “Is this a want or a need?” Needs are essential — things you can’t live or work without.Wants are things you’d like to have, but you can live without them.
Continue
Needs
Wants
Examples
Examples
• A place to live• Basic food and clothing• Transport to work or school• Internet for school/work• Medical care
• A trip abroad• Newest smartphone• Eating out often• Fashion brands• Concert tickets
Reflect
"Is borrowing for this really necessary?"→ Will it help your future, or is it just something fun for now?
Continue
Continue
Continue
Key takeaways
• Borrowing for personal enjoyment isn’t always wrong, but it can become a problem if it creates unnecessary debt.• Think long-term. Is it a want or a need? Will it help your future?
Continue
Mortgages explained
Continue
Understand mortgage
What is a mortgage? A mortgage is a special kind of loan you take from a bank or lender to help buy a home. Since houses cost a lot, most people can’t pay the full price upfront. So, they borrow money and agree to repay it monthly over many years.
Continue
How it works?
You pay part of the home price upfront - this is called a down payment. 🏠 Example: If the apartment costs €120,000 and you pay €20,000 from savings, the mortgage will cover the remaining €100,000. You choose how long to pay it back. That’s called the repayment period (e.g., 20 or 30 years). Longer periods = smaller monthly payments, but more total interest. The bank charges interest – a fee for borrowing the money. It’s added to your payments.
Continue
Interest and time
Even if the interest rate seems small (like 2.5%), over 20–30 years, you might pay tens of thousands in interest. That’s why choosing the right mortgage length and rate is super important!
Variable interest rate can change depending on the economy. ⚠️ Might go up or down — can be riskier but cheaper at first.
Fixed interest rate stays the same the whole time.✔️ Safer and predictable.
Continue
Rob’s first apartment
Please, fill in the blanks:
Continue
Rob needs to make sure the monthly mortgage payment cost fits into his €1,800 income, and he has money left for food, bills and savings!
Continue
Key takeaways
Mortgages are big, long-term decisions. Always ask yourself:• Can I afford the monthly payment?• What happens if costs go up?• What’s better for my future — short-term comfort or long-term savings?
Continue
Credit scores
Continue
What is a credit score?
A credit score is like a school grade for how well you manage money. Banks use it to decide if they can trust you with a loan or credit card. Higher score = better loan offers and lower interestLow score = might be denied or pay more
Continue
How is it calculated?
Types of credit used
Payment history
New credits
Amount of debt
Length of credit history
Do you pay your bills on time?
How much money do you already owe?
Too many new loans in a short time = risk.
How long you’ve had credit accounts.
A mix (credit card, loan, etc.)
Continue
Why does it matter?
Sign an apartment lease?
Some landlords can check your credit history!
Want a car loan?
Your score decides if you qualify.
Want a work contract?
Companies may check your credit.
Continue
Credit score Myths & Facts
❌ False
✅ True
💳 “You only need a credit score when you’re older.”
🏦 “A good credit score helps you get better loan deals.”
You may need it as soon as you get your first phone contract or rent.
Lenders trust you more and offer better interest rates.
❌ False
❌ False
📉 “Missing one payment won’t hurt your score.”
🔄 “Checking your credit score often will lower it.”
✅ True
Even one late payment can affect your score significantly.
Checking your own score is safe and does not affect it.
💼 “You build credit by having different kinds of credit.”
Credit mix is part of the score calculation.
Continue
Higher scores get better loan deals; low scores may mean denial or higher costs.
A credit score shows how well you manage money and helps lenders decide on loans.
Key takeaways
It’s based on payment history, debt amount, credit length, credit types, and new credit.
Continue
Risks & red flags
Continue
Recognizing dangerous lending practices
Not all loans are safe. Some lenders use tricks or pressure to make people borrow money they may not understand or can't afford. Borrowing is a tool — but just like any tool, it can be dangerous if misused. Here are some things to have in mind...
Continue
Over-indebtednessWhen someone borrows too much and can’t keep up with payments. This can lead to stress, unpaid bills, or losing important things like a home.
Predatory lending Some lenders take advantage of people by offering loans with unfair rules, huge interest, or hidden fees.
Loan scams These are fake or illegal offers that look real but are designed to steal your money or personal info.
Continue
Dangerous vs. Safe borrowing
it probably is.
Always ask questions and read everything carefully.
If it seems too good to be true,
Continue
Rob gets 3 loan offers
Rob needs €1,000 for car repairs so he can keep going to work. He receives 3 loan offers. Can you help him decide which one is best — and which to avoid?
Please, choose:• The safest offer • The unclear offer • The risky/predatory one Discussion questions: • What made you choose that? • What would you do if someone pushed you to sign quickly?
Continue
Key takeaways
Borrowing money is a responsible choice. Before making it, always ask yourself:• Do I understand how much I’ll repay?• Do I trust the source? • Is this affordable for me?
Continue
Wrap-up
Continue
What did we learn?
Continue
Let's think back...
💭 What’s one important thing you learned about borrowing money?🧠 Before taking a loan, what should you always check?📊 Why do interest rates and loan terms (time) matter so much?🚩 What are some signs that a loan might be risky or unfair?🤔 How can you tell the difference between a “want” and a “need”?🖊️ What would YOU do before signing a credit or loan agreement?
Continue
Glossary
Continue
Glossary cards
Click or flip each card to assess your knowledge on common financial terms.
The total yearly cost of borrowing money, including both interest and any additional fees.
A number that shows how reliable you are at managing money and repaying loans.
An interest rate that stays the same for the entire loan term, so payments are predictable.
APR (Annual Percentage Rate)
The period of time you agree to pay back a loan or mortgage.
Repayment term
Fixed interest rate
Credit score
Planning how to spend and save your money so you can afford your needs and avoid debt.
An interest rate that can go up or down depending on the economy or market changes.
The amount of money you pay upfront when buying something expensive, such as a house.
Down payment
Variable interest rate
Budgeting
Continue
Glossary cards
Click or flip each card to assess your knowledge on common financial terms.
Unfair or deceptive lending that traps people in expensive debt with very high interest or hidden fees.
A way to decide what’s essential (needs) and what’s optional (wants) before borrowing.
When someone borrows too much and can no longer afford repayments.
A fake loan offer designed to steal personal information or money.
Needs vs. Wants
Over-Indebtedness
Predatory lending
Loan scam
A legitimate loan with clear terms, fair interest, and realistic repayment conditions.
A loan that has unclear rules, very high costs, or pressure to sign quickly.
A person or institution that gives money to be repaid later, usually with interest.
Lender
Risky loan
Safe loan
Continue
References
Continue
Co-funded by the Erasmus+ Programme of the European Union Project No.: 2024-1-PL01-KA220-YOU-000251498
Thank you!
Start
Example
A flashy online ad promises “Instant Cash – No Questions Asked!” Rob applies and gets €500, but the lender wants €100 every week for 12 weeks. The total cost? More than double the loan!
Example
Peter gets a message saying he’s pre-approved for a €5,000 loan. But before receiving the money, he's told to pay a “processing fee” upfront. He sends the money—then hears nothing back. It was fake.
Example
Lina took out a loan for a new phone, then used a credit card for clothes and borrowed again for a trip. Now, her monthly payments are more than half her income. She’s stressed and falling behind on bills.