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When you want to purchase something for your home but you do not have all the cash at hand, then it is worth considering a higher purchase mode of payment. Hire purchase is a great way to get the asset that you want even when you do not have all the required money.

How does hire purchase work?

When you opt for a hire purchase to buy assets such as appliances, electronics, or furniture for your home, you will only be required to pay a deposit. This is usually a fraction of the total price of the asset you intend to purchase. According to the agreement between you and the seller, you will be required to pay the balance within the set duration. In the case of personal assets, the installments are spread out over several months. This helps you to spread out payment. After paying the deposit, the asset you need will be delivered to your home. However, its ownership will be transferred to you when you pay all the installments.

Advantages of hire purchase

Spread out the purchase cost: The number one reason to choose hire purchase is that you will spread out the cost of buying the assets that you require. You do not have to pay one big lump sum for the smart TV, furniture, or kitchen appliances. This is convenient especially if you are paid monthly as you can easily plan for the payment.

Get the item once you sign the agreement: In a case where one wants to purchase items on cash terms, they might need to save several months before ever acquiring the asset. On the other hand, when you choose to hire purchase, after paying the deposit and signing the agreement, you will have the right to use your asset. You do not have to wait until you have saved enough.

Get full ownership after the last installment: In the case of lease agreements, one only pays installments, but they never get the ownership of the asset. On the other hand, a hire purchase functions like a rent-to-own agreement. You will be using your smartphone, subwoofer, or even kitchen cooking gas while paying the installment. After the last installment, you will have the ownership transferred from the seller. This is a better alternative to leasing items.



What is hire purchase?


Hire purchase is one of the payments methods available in the modern Kenyan market. If you are looking to purchase appliances, furniture, electronics, and other expensive assets for your home, the price might be a bit high. This means that one might be unable to purchase such products and pay all the required cash at once. Hire purchase allows you to pay a fraction of the total amount initially, known as a deposit or down payment. You will pay the remaining balance within a set duration, and in various installments. The deposit is paid initially when the product you require is delivered.

How Does A Hire Purchase Agreement Contract/Agreement Work?

If you opt to purchase a certain asset for your home using a hire purchase agreement, you will be required to pay the deposit but not the whole price. After paying your deposit, you will have the right to use the asset. However, the ownership of the asset remains with the seller. After one pays the down payment, one will need to pay the set installments with interest. The terms and conditions relating to the period of repayment are decided before one signs the agreement. The ownership of the appliance, furniture, or electronics will only be transferred when one completes paying the installments. This means that the asset can be repossessed by the seller if the buyer fails to pay the installments.

Types Of Hire Purchase

Hire purchase is usually divided into two categories

  • Industrial hire purchase: In this case, the assets are purchased by a company or a business. This usually involves purchasing high-end machinery.
  • Consumer high purchase: Kenya Credit Traders Limited specializes in this type of high purchase. It usually involves a consumer purchasing personal assets to furnish their home. Whether you need furniture, electronics, kitchen appliances, or other essential assets, this is the ideal payment method.

Visit our site to view products available on hire purchase terms.