Hire purchase is one of the most favorable financing options available to buyers in the Kenyan market. There are plenty of assets one can purchase using hire purchase. From furniture, kitchen appliances, mobile phones, and electronics, to cars and houses, there are plenty of assets a business or an individual can acquire using a hire-purchase agreement.

How hire purchase works

With a hire purchase, you do not need to have all the cash with you to acquire an asset. It is the ideal alternative when you do not have the money for an outright purchase. One needs to put down a deposit for the asset, which is a percentage of the total cost. After making this down payment, the total cost is spread over a period. This duration usually depends on the worth of the assets you are purchasing. This is beneficial since it helps protect the buyer from disruptions in their cash flow and capital.

How to get hire purchase

When you have identified the assets that you require for your home or business, it is time to find the best hire purchase deal. Here are some essential tips to help you get a hire purchase.

  • Research about interest rates: the difference between deals from one vendor to the other is usually a result of the annual percentage rate of interest. Carry out your research to understand interest rates and have an idea before committing to any deal. Here is an educative blog about hire purchase interest rates.
  • Always consider the total cost: one of the reasons one settles for a hire purchase is the flexibility that this payment option offers. However, low monthly repayments will mean a higher total cost. On the other hand, fewer months means less interest and lower overall cost. Most hire purchase dealers require you to provide financial statements to prove that you are able to pay the installments.
  • Compare deals from different dealers: Different vendors will have different deals. Take your time to compare the deals and find one that suits you. Cheaper products at times mean lower quality. The best solution is to seek value for your money.
  • Do not rush: While the benefits of hire purchase can excite any buyer, it is advisable that one takes time and read through the hire purchase agreement. Understanding the terms and conditions ensure that you make an informed decision.

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