Every financing option has benefits and drawbacks, and hire purchase is no exception. Before signing the agreement, it is also vital to check any pitfalls in hire purchase agreements and avoid them.
Hire purchase remains of the best financing options available for home and business owners. Hire purchase financing allows buyers who cannot purchase assets upfront to pay for them in installments.
How Hire Purchase Works
It is vital to learn how hire purchase works before choosing it as your financing option. The first step when looking for assets is determining the items you want to purchase. One then determines if there is a hire purchase dealer selling them or they will need to seek financing from a traditional lender.
Hire purchase dealers such as Kenya Credit Traders sell a lot of items you need for your home or office. The dealer only requires you to deposit 10% or more of the total cost of the items you intend to purchase. Beside the deposit, one also pays installments periodically to pay for the items fully.
Common Pitfalls in Hire Purchase Agreements and How to Avoid Them
There are several mistakes that buyer do when they are looking for a hire purchase deal. Here is a look at these mistakes and how one can avoid them.
The number one mistake most buyers make when signing a hire purchase agreement is ignoring the fine print. Some buyers do not take time to read the hire purchase agreement and end up rushing to sign. This can increase the cost of items due to hidden charges and costs by some hire purchase dealers. Always ensure that you understand the terms and conditions before signing the hire purchase agreement.
Another common pitfall for buyers signing a hire purchase agreement is buying items they do not need. The excitement of getting new assets, electronics, or appliances can lead to one signing a hire purchase agreement. By the them they choose to cancel the contract, they will have paid a deposit, some installments and even an early termination fee.
It is also common for buyers to end up as victims of fraud when they are looking for hire purchase deals. The best way to ensure you do not become a victim is ensuring that you only work with a licensed hire purchase dealer such as Kenya Credit Traders.