Your home deserves quality appliances and furniture. The primary reason a homeowner plans to spend on household essentials is to improve the quality of life. However, adding the necessary appliances and furniture also increases the value of your home.
When in the household essentials market, the high cost of the items can be troublesome for homeowners. This leaves them looking for the financing options available to them. Some of these options include fast loans, traditional credit, and hire purchase. In this post, we will determine why a hire purchase is an ideal option to acquire quality household essentials.
What Is A Hire Purchase Agreement?
A hire purchase agreement is an alternative to a cash purchase. When you do not have the cash to make a cash purchase, a hire purchase agreement is an option. In a hire purchase agreement, you do not pay for the essentials up front. However, payment is divided into two. First, one pays a certain fraction of the total cost as a down payment. After the down payment, the homeowner can take the essentials home and use them. The remaining balance is then paid in installments. These are periodic payments and one pays them while still using the assets.
The hire purchase agreements in Kenya are regulated through the hire purchase acts. This means that you rights are protected when you acquire goods through an agreement within the hire purchase threshold specified in the act. In Kenya, the hire purchase threshold is Ksh 4 million.
Affordability Of Hire Purchase Agreements
One of the downsides of a hire purchase is that you end up paying more than in a cash purchase. However, a hire purchase agreement is more affordable than a cash purchase. Here’s why.
One of the reasons why homeowners are choosing hire purchase is the affordable downpayments. The hire purchase dealers only need a fraction of the total cost for you to acquire the items. The down payment in some cases is as low as 10% of the total cost. This makes it easier to acquire assets through a hire purchase agreement.
Another reason why hire purchase agreements are all about affordable living is that payment is done in installments. The installments are flexible and affordable considering that they are customized to suit the needs of the customer. On the payment of the last installment, the dealer transfers the ownership rights to the buyer. This makes hire purchase a convenient, affordable, and quick way to add assets to your home.
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