Take out

Take out

Today, I’m going to show you a very specific way of using the phrasal verb “take out.” To take out a loan or to take out an insurance policy means to obtain a loan or an insurance policy.

“Take out” is used like this primarily with loans and insurance.

If you want to start a brewery , you need a lot of money. You need to buy all the equipment , rent the space , hire the staff . You might have to take out a loan to get started. That means, you might have to obtain a loan from a bank to get started. If you “take out a loan,” you get a loan.

In the U.S., most people buy homes with mortgage loans . Let’s say, you dutifully pay down the mortgage loan on your house for many years, so that the balance is now lower. Let’s also say the value of the house has risen. And now you need some money, maybe to renovate the house, replace the roof , whatever. Here’s one thing you can do. You can take out a second mortgage.

That’s a second loan that’s secured by your house—a different loan, usually with a different bank. You can do this when your first loan is no longer a high percentage of your home’s value.

You can take out a second mortgage to pay for repairs ; you can take out a second mortgage to pay expensive medical , legal , or educational expenses ; you can even take out a second mortgage to pay for your lifestyle, like a great vacation, although I don’t recommend that.

Credit cards are a form of loans. You might sometimes say you’ll take out a new credit card, although that’s not as common. It’s more common to say you’ll “get” a new credit card.

A business that has a lot of inventory might take out a revolving line of credit ; that’s a type of loan. That lets them use a little credit, pay it back , use a little, pay it back, kind of like a credit card, only for bigger numbers.

Here’s a great example of that: Car dealers take out inventory loans. These revolving loans help them buy the cars for sale. The cars you see sitting on the lot : the dealer doesn’t buy those with its own money. The dealer takes out an inventory loan, borrows the money to buy each car, and then pays that amount back when the car is sold. That’s called a floor plan loan.

And you can also take out student loans. In the U.S., education is expensive. There are different ways to finance it . But many students, undergraduates and graduate students, they take out student loans. They get loans to pay for their education. Future doctors and lawyers take out loans for medical school and law school. You get the idea: “take out a loan” means to get a new loan.

Another way to use “take out” is with insurance. Some insurance , you just need to have. If you get a car, you’re required by law to have car insurance. If you get a house, you’re required by your bank, usually, to have insurance. Since you always have these, or you get them when you buy the car or the house, we don’t typically use “take out.”

We typically use “take out” when it’s your decision to get an insurance policy. Life insurance is a great example. Not everyone has it; not everyone needs it. But if you decide to have kids, you might decide to take out a life insurance policy . That’s your decision. You go to the insurance agent and you obtain the policy. You take out a life insurance policy.

You can take out something called an umbrella liability insurance policy. This is insurance against getting sued for almost any reason . If you have a lot of money, if you have a lot of property , you might want to take out an umbrella insurance policy. It’s not required . But you might want to take out this kind of policy.

Before we finish, I just want to mention that you can also use “take out” with subscriptions or memberships , though this is less common. You can say, “I’m planning to take out a gym membership next month” or “I’m excited to take out a subscription to The New Yorker magazine.”

But by far the most common use of “take out” is with loans and insurance policies.

See you next time!

That’s all for us here at Plain English today, July 15, 2024. This was lesson number 692, so that means JR has uploaded the full lesson content to PlainEnglish.com/692. That’s the transcript, the quiz, the exercises, translations, all that good stuff is at PlainEnglish.com/692.

We’ll be back on Thursday with a new topic: remember, this one is about the average budget of an American household. What do they spend their money on? That’s what you’ll learn on Thursday. See you then.