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Hire purchase remains one of the best financing options. Businesses looking to invest in assets opt for hire purchases to spread out the cost and have control over the cash flow. Hire purchases are also available to consumers in modern times. Homeowners looking for high-ticket items such as smart TVs, refrigerators, washing machines, and other appliances can acquire them through a hire purchase agreement.

The Evolving Financial World

Change is inevitable, even in the financial world. The financing options and methods keep evolving with time. It is the same case for hire purchase deals.

Hire purchase has come a long way. With the latest technology, everything becomes easier as a hirer has the opportunity to learn about hire purchase from the comfort of home or office. Blogs, such as this one, help educate customers about hire purchase agreements and how they work. Financial technology has also been incorporated in hire purchase deals in various ways.

The Role Of Mobile Money Payments In Hire Purchase

Mobile money payments enable easier payment for installments and the deposits. M-Pesa, a popular mobile money service in Kenya, was a key introduction that helps make payments hassle-free. One can even easily transfer money from their bank to their mobile wallet without physically visiting the bank. Mobile money payments give the hirer control over their payments.

The Role Of Online Portals And Financial Technology Apps

Another essential technology that aims at improving hire purchase contracts is online portals and financial technology apps. With the existence of a portal, the hirer no longer needs a visit to the hire purchase dealer. They can get all the information they need about their hire purchase debt from the comfort of their home or office. When one makes a payment, it immediately reflects on the portal. This gives you control over your debt. In the case of apps, they will send notifications on when to make payments, thus helping you avoid penalties.

The Role of Digitization of the Hire Purchase Process

Another common trend in hire purchase is digitization of the whole process. It is possible in modern times to find assets online, through a hire purchase dealer’s website. It will be possible o sign the hire purchase contract online and upload the necessary information on the dealer’s portal. In the end, the dealer ships the items to your doorstep.  This change will eliminate the hassle of finding time to visit a hire purchase dealership in person.

Will Crypto Currency Change the Hire Purchase Industry

It is hard to ignore the fact that cryptocurrency is here and is being accepted as a payment method in some quarters. While it is not currently working for hire purchase deals, it might be integrated in the future, allowing shoppers to pay their deposit or installments digitally.

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Hire purchase arrangements remain a favorable financing choice for businesses and homeowners looking to acquire assets. The numerous benefits hire purchase offers are the primary reason to consider this financing option. With a wide variety of assets available on hire purchase terms at Kenya Credit Traders (KCT), we will check some of the KCT payment options.

How Hire Purchase Works

Hire purchase arrangements work for homeowners and business owners who want to acquire items but cannot pay in cash. Unlike a cash purchase where must to pay all the cash before acquiring assets, a hire purchase agreement only requires a fraction of the total cost. When one pays this amount, known as a deposit, they acquire the assets for their use. The balance is spread out into installments.

Flexibility Of Hire Purchase Contracts

Flexibility is one of the biggest perks of a hire purchase agreement when settling for electronics like Vision Android Smart Tv. While there are many benefits of utilizing hire purchase agreements, flexibility is arguably one of the best reasons to settle for a hire purchase. A flexible agreement gives you control over the payment. Here’s how KCT payment options are flexible.

Flexible Payment Schedules

Hire purchase agreements come with flexible payment schedules. The ability to spread the cost is one of the best reasons to choose hire purchase agreements. Depending on the value of the assets, as well as your income, you can choose to make daily, weekly, bi-weekly, or monthly payments. At KCT, mobile money payments through an M-Pesa Paybill account are available. This gives you control over the repayment.

Flexible Deposit Amounts

Before spreading out the cost into installments, one has to make a down payment. The down payment is also known as a deposit. The deposit determines the balance that one has to repay in installments. Making a big amount as a deposit means you have less balance to pay in installments. KCT requires as little as 15% of the total cost from the buyer as a down payment. The buyer chooses the amount to pay as a down payment, making the hire purchase a flexible option.

Flexible Contract Duration

The duration of a hire purchase agreement is not fixed. However, it depends on other factors such as the deposit, payment schedule, and installments. By choosing a higher amount as a deposit or installments, the contract duration is shorter. However, you can also choose lower amounts as deposit and repayments, making the contract duration longer.

Find more exciting and educative hire purchase blogs here.

The importance of sustainability lies in harnessing natural resources responsibly to construct a more eco-friendly future, a critical aspect of environmental preservation in today’s world. Climate change remains a central topic in global discussions, with adopting sustainable practices emerging as a key solution to mitigate its effects. In this article, we explore how employing hire purchase arrangements can contribute to fostering a greener society, particularly focusing on the procurement of new Haier fridge and chest freezer products.

Hire Purchase for Sustainability

There are various avenues through which homeowners and businesses can leverage hire purchase agreements to embrace sustainability. One such approach involves utilizing hire purchase to invest in renewable energy sources. For instance, opting for hire purchase to acquire solar panels enables households and businesses to generate electricity sustainably, reducing reliance on environmentally harmful energy sources.

Another avenue for utilizing hire purchase in promoting sustainability is by acquiring eco-friendly appliances and electronics, including Haier fridge and chest freezer products. Traditional appliance models are notorious for their high energy consumption. However, upgrading to newer, more energy-efficient models not only saves money in the long run but also contributes to environmental preservation. Kenya Credit Traders offers a diverse range of household appliances available for hire purchase, facilitating the transition to sustainable living.

Benefits of Sustainable Investments in Homes and Businesses

Embracing sustainability in homes and businesses yields a multitude of benefits, ranging from financial savings to environmental conservation and improved health.

1. Cost savings on energy expenses: Opting for sustainable appliances and electronics leads to significant reductions in energy bills over time. Modern appliances are designed to be energy-efficient, resulting in lower operating costs while promoting environmental responsibility.

2. Creating healthier living and working environments: Investing in sustainability extends beyond financial considerations to enhancing the quality of living and working spaces. By adopting eco-friendly appliances, such as Haier fridge and chest freezer products, households and businesses can minimize exposure to harmful chemicals and pollutants, thereby reducing air pollution and improving overall health.

3. Contributing to global environmental efforts: By reducing carbon footprint through the adoption of sustainable practices, individuals and businesses can actively contribute to mitigating climate change and promoting environmental sustainability. Opting for hire purchase arrangements for eco-friendly appliances represents a tangible step towards reducing pollution and fostering a greener planet.

In conclusion, embracing sustainability through hire purchase arrangements presents an opportunity for individuals and businesses to make tangible contributions towards environmental conservation. By investing in eco-friendly appliances like Haier fridge and chest freezer products, and renewable energy sources, households and businesses can enjoy numerous benefits while playing a crucial role in shaping a more sustainable future.

Hire purchase is the ultimate choice for business owners and consumers looking for expensive assets. Hire purchase allows a buyer to invest in assets that would be out of reach if they had to pay in cash. It also ensures that you get access to quality products. Here’s a look at how hire purchase deals balance affordability and quality.

How Hire Purchases Make Items Affordable

One of the best reasons to settle for a hire purchase deal when you need products is the ability to make items affordable. Items such as furniture, appliances, and electronics can be really expensive. If one has to wait until they save enough to purchase these items, they might take months or even years.

If you choose a hire purchase deal, you can acquire products that are not affordable in a cash purchase. A hire purchase deal allows you to acquire products by only paying a fraction of the total cost. The balance is then spread into monthly installments. Spreading the cost into flexible and affordable installments makes the products accessible and affordable.

How Hire Purchase Makes Quality Products Accessible

Another benefit of hire purchase is that it makes quality products accessible. By making products affordable, customers no longer have to compromise quality due to the high cost of the assets. Customers who cannot purchase items due to affordability usually settle for cheap items.

Hire purchase empowers buyers to buy almost any product on the market. The flexible and affordable installments mean a buyer can acquire products at any given time. Quality products do not come at cheap prices. However, spreading the cost to small affordable amounts makes the products accessible to all consumers.

How KCT Balances Affordability and Quality of Products

Kenya credit traders offer consumers the opportunity to upgrade a home by offering furniture, appliances, electronics, and gadgets. You do not need to wait until you have enough savings to spend on your dream smart TV, a dishwasher, or even a refrigerator. With only 15% of the cost of any items you require, KCT will provide them and allow you to clear the balance in installments. All products at KCT have a warranty, and this means you do not have to worry about the quality of these products.

Hire purchase, like any other financial decision, has benefits, disadvantages, and pitfalls. Hire purchase remains one of the best asset financing options for consumers and business owners. The many benefits of hire purchase agreements motivate buyers to consider this purchase option. However, when you are not keen, you can end up making a mistake that will prove costly.

What Is a Hire Purchase Agreement

A hire purchase agreement is a contract between a hirer and a dealer that allows the hirer to acquire goods without paying upfront. Before acquiring assets, the hirer has to pay a deposit to the dealer. After the deposit, the hirer clears the balance in installments.

Benefits of hire purchase agreements

There are different benefits that will motivate a hirer to sign a hire purchase agreement. Here are some of the benefits.

·         Quick access to items:

Hire purchase ensures you can access items even when you can’t afford to pay in cash. By choosing hire purchase, you only need to pay the deposit and prove you can afford the installments.

·         Flexible and affordable repayments

Another major benefit of a hire purchase deal is that the repayments are flexible and affordable. You can negotiate with the dealer to get a deal tailored to suit your needs.

·         Access quality assets

Lack of enough funds can lead to a buyer settling for low-quality items. However, hire purchase makes even the most expensive assets affordable through spreading the cost. This means you no longer have to compromise quality due to lack of enough funds.

Hire Purchase Pitfalls

While hire purchase has so many benefits, there are also pitfalls that a buyer ought to consider. Here are some pitfalls and how to avoid them.

1.      Hidden charges

There are hire purchase dealers that have hidden costs when you choose them. The downside of the hidden charges is that they increase the total cost of the assets. To avoid this pitfall, there is a need to check the contract thoroughly and understand all the charges before signing.

2.      Discretionary purchases

At times, one can be tempted by the benefits of hire purchase deals to spend on items they do not need. It is always advisable to only spend on assets that will improve your home or enhance productivity in your business.

3.      Rogue dealers

When you are not keen, you can end up in hands of scammers. It is always desirable to carry out due diligence and settle for reputable dealers such as Kenya Credit Traders. Only choose a hire purchase company that is licensed.

We have educative hire purchase blogs here.

Hire purchase is one of the best financial decisions one can make when in the market to purchase assets. There are plenty of benefits of hire purchase. One such benefit is spreading the cost. By choosing to hire purchase, the buyer pays in installments to meet the total cost of the items—another major benefit of a hire purchase agreement is better finance management. The installments are fixed throughout the hire purchase agreement. This means you can budget ahead for the repayments, thus giving you better control over your finances.

In this post, we will check how you can enhance finance management while having a hire purchase agreement.

Ideas for managing finances during a hire purchase deal

Hire purchase repayments are flexible. When signing a hire purchase deal, you can negotiate with the dealer to ensure you get a deal that suits your needs. Here are other ways to manage your finances.

·         Only use hire purchase to purchase items that you need

Hire purchase can be exciting due to the prospect of spreading the cost. This makes almost any asset affordable. However, it is vital to only spend on items that add value to your home or business. Spending on items that you do not need will only make them a liability rather than an asset.

·         Negotiate for the best deal

When signing a hire purchase deal, there is a need to negotiate with the dealer for installments that suits your needs. Hire purchase agreements are flexible. One gets to choose the duration within which they will pay for the items.  Longer duration means low installments which are affordable. However, if you are capable of paying a higher amount in installments, it will mean that the hire purchase agreement takes a shorter duration.

·         Pay extra to clear the balance ahead of schedule

At times, a hirer can have extra cash to clear the balance. When you can pay ahead of schedule, it will help you avoid defaulting even in a case where you are well up financially. Most hire purchase agreements allow for early payments.

·         Return the goods back to the dealer

Most hire purchase deals allow for the hirer to end the agreement. You do not need to wait until you sink into debt to end the hire purchase deal. When you no longer need assets you are hiring, you can end the agreement.

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Are you acquiring assets for your home or business? Are you torn between a hire purchase agreement and leasing?

High value assets can be expensive for any business or consumer to pay in cash. In such cases, finding financing options is the best choice. Some business owners settle for loans to purchase assets. However, the high interest rates can be a hinderance. Leasing and hire purchase are thus the ideal choice when you are looking to acquire new assets.

How a Leasing Agreement Works

Leasing involves hiring assets from a dealer for a given duration. The hirer acquires the items from the dealer for use. During the duration of the leasing the items, the hirer pays installments to the dealer. At the end of the hire purchase agreement, the hirer returns the assets to the owner.

How A Hire Purchase Agreement Works

A hire purchase agreement is almost similar to a leasing contract. In this case, you pay a certain amount as the down payment for the asset. After paying the deposit, you acquire the items and you can utilize them. One also makes repayments throughout the hire purchase agreement. At the end of the hire purchase agreement, the hirer acquires the ownership of the assets.

Differences Between Hire Purchase and Leasing

There are key differences between hire purchase and leasing agreements. Here are some of the differences.

1.      Transfer of ownership

The issue of ownership is the biggest difference between leasing and a hire purchase agreement. There is no chance to become the owner in the case of leasing. However, in a hire purchase agreement, one becomes the owner when they complete payments.

2.      Deposit

One doesn’t need to pay a deposit to acquire an asset in a leasing agreement. However, in the case of a hire purchase agreement, you are required to make a down payment before taking the assets. This is usually a fraction of the total cost. The down payment can be as low as between 10% and 20%.

3.      Duration of the agreement

It is possible to have a lease agreement that lasts several years. In the case where you still need the assets, you can choose to extend the lease agreement. This is not the case with a hire purchase agreement. To reduce the total cost of the assets, the buyer reduces the duration of the agreement. Hire purchase agreements usually lasts several months.

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Hire purchase remains one of the best financing methods in the Kenyan market. Consumers as well as businesses can benefit from hire purchase when acquiring high-ticket assets. Furniture, cars, electronics, appliances, and machinery are some of the common assets you can acquire on hire purchase terms.

It is vital to consider effort and time finding the right hire purchase agreement before committing to a deal. Just like in any financial decision, it is desirable to check a variety of aspects to get the best out of a hire purchase deal. Here are the key considerations.

Considerations in a hire purchase agreement

1.      Do you need the asset

Before committing to a hire purchase agreement, one needs to determine whether they actually need the asset. Hire purchase deals can look exciting due to the spread cost. However, one should only invest in items they require.

2.      Is the asset a long term investment?

Hire purchase is not the best option for short-term investments. The total cost of a hire purchase deal is always higher than a cash purchase. In the case of short-term assets, it is advisable to settle for leasing as it will offer you a better deal.

3.      Depreciation

There are assets a consumer or a business purchases with a view to resell them in future. When considering the total cost of the items, it is important to consider whether it will be useful at the end of the hire purchase agreement. This helps you determine whether you can get a better resale value.

4.      Interest rates

The total cost of items in a hire purchase deal is higher than cash purchase as a result of interest charged on the installments. Lower rates mean lower total cost. Compare interest rates from different dealers to ensure you get the best deal.

5.      The total cost of the items

It is advisable to compare total cost of items with the cash price. However, while hire purchase price is higher, it is vital to keep in mind that the cost is spread out, making the payment process easier.

6.      The reputation of the dealer

Before signing the hire purchase agreement, it is vital to ensure the dealer is reliable. Online reviews, comments on their social media pages, and ratings can help you understand whether a given company is reliable.

7.      The repayment terms

Before signing a hire purchase deal, check the repayments terms to ensure they are favorable. Late payments and defaulting can see the dealer repossess the items.

8.      Penalties

It is also vital to check the penalties charged in the case of late or missed payments. These charges only increase the total cost of the items.

9.      Hidden charges

The hirer also needs to check the hire purchase agreement to determine whether there are any hidden charges that can increase the cost of the assets.

10.  Other financing options

When acquiring assets, it is desirable to assess different financing options. Always focus on finding the best deal that offers value for money.

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Are you thinking about purchasing on a hire purchase agreement? Are you worried about your credit score? As with any financial decision, it is essential to invest effort and time and identify out what is right for yourself.

How do hire purchase agreements work?

A hire purchase agreement is a purchase deal that allows a buyer to acquire items without having to pay the full cost upfront. In a hire purchase agreement, a buyer only pays a deposit to acquire assets. This is usually between 10% and 15% of the total cost. Once the buyer makes the down payment, they acquire the assets and they can utilize them. However, during this period, the buyer is only hiring the items and is referred to as the hirer. The seller retains ownership title until the hirer makes full payment for the assets.

What Is the Role of Credit Score in Hire Purchase Agreements?

Credit checks play a part in hire purchase transactions. A hire purchase dealer relies on your credit rating to determine whether you are eligible for a hire purchase deal. A credit rating provides the dealer insight into the creditworthiness of the hirer. Here are some reasons why dealers rely on the credit score.

1.      Mitigating risks

The primary reason the dealer will check your credit score is to mitigate risk. The credit trader tries to understand whether the hirer has a history of defaulting payments. Dealers that do not check credit scores risk not receiving payments from the hirer.

2.      Ensuring affordability

By checking your credit score, the dealer can determine whether you can afford the hire purchase agreement. Your income and expenses provide the dealer an insight on whether you have sufficient income to make payments.

3.      Protecting you as a buyer

A hire purchase deal can be exciting for any buyer. If the dealer approves applications without credit checks, it is possible for a buyer to sign a hire purchase agreement that is not conducive or affordable. Missed payments, late payments, and defaulting not only damage your credit score, but they can also cause the dealer to repossess the items.

Can I Get a Hire Purchase Agreement with A Bad Credit Rating?

Buyers with bad credit ratings can be eligible for hire purchase agreements. However, it is likely that you will pay higher interest for the assets. However, in some cases, dealers will not approve your agreement due to poor credit rating.

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Hire purchase remains one of the best financing options for businesses looking to finance assets. By choosing hire purchase, a company can acquire new assets and thus enhance productivity. In this article, we will discuss how hire business hire purchase works and the benefits and drawbacks of using it to expand your business.

What Is Business Hire Purchase?

Business hire purchase is a payment agreement where a business acquires an asset without paying the full amount upfront. The business makes a down payment, and it can be as low as 10 or 15% of the total cost. The business utilizes the asset while making payments in the form of monthly installments. This is a good option for a business looking to acquire an asset quickly. While the business acquires and uses the assets, legal ownership is only transferred when the total cost is paid to the dealer.

What Are the Pros of Using Hire Purchase for Business Expansion

As a business, the decision to acquire new assets through a hire purchase agreement has some benefits. Here are some of the benefits.

1.      Acquire Assets Without Upfront Payment

One of the biggest advantages of using a hire purchase agreement is that it allows you to acquire assets without paying a large upfront payment. Acquiring assets such as vehicles, electronics, and furniture in a cash payment can cause a strain on your cash flow. Businesses with limited capital or cash flow constraints will benefit greatly from a hire purchase arrangement.

2.      Spread the cost

Payment of assets in a hire purchase agreement is done in installments. Spreading the costs not only helps you manage the cash flow more effectively but also helps you make better financial planning and budgeting.

3.      Ownership at the end of the agreement

Hire purchase allows a business to retain assets at the end of the agreement by transferring title from the seller. Leasing is an alternative to hire purchase deals. However, in a lease agreement, the ownership of the asset remains with the dealer even at the end of the agreement. In a hire purchase deal, the hirer ends up owning the assets after the final payment.

4.      Flexible terms and repayment options

With a hire purchase agreement, a business has the chance to tailor the deal to suit their specific needs as well as financial circumstances.

Cons Of Using Hire Purchase for Business Expansion

The only downside of using hire purchase for business expansion is that the total costs is higher than in the case of a cash purchase. However, the many benefits of this financing option overshadow this drawback.

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