Hire purchase agreements are a popular way to acquire assets for a home or business in modern times. The many benefits that hire purchase offers lure shoppers to consider it over other financing options. However, while some shoppers enjoy success while shopping using hire purchase, others end up with regrets. Keep reading as we check some of these real-life stories.
Successes associated with hire purchase
Many shoppers who choose hire purchase agreements when purchasing items for their home or business have highlighted a variety of benefits. Here are some of the advantages some of the shoppers noted.
Hire purchase makes the process of purchasing assets easier by allowing the buyer to split and spread the cost. A buyer only pays some cash as the down payment for the items they are purchasing.
Abdul Rashid was looking for furniture for their new home. After spending much money in purchasing the home, he did not have enough cash to purchase furniture. However, through a high purchase agreement, he was able to acquire quality furniture and pay in installments. He only used a fraction of his monthly salary to pay for the furniture, all while using the furniture pieces in their home.
Another benefit of hire purchase is the interest rates a buyer enjoys. If one opts for other financing options such as a term loan, they incur high interest due to high interest rates. Here is a case example from a buyer.
According to Korir, a buyer from Kericho, hire purchase saves a lot of money in comparison to other financing methods. Previously, he turned to short-term loans from online lenders when purchasing assets. Term loans come with high-interest rates. The rates can also change depending on base rates from the Central Bank. However, with the hire purchase, he enjoys fixed interest rates. The installments remain the same all the time and this makes it easier to budget for the payments.
Regrets from hire purchase agreements
Hire purchase, like any other financing method also has some downsides. One of the major downsides quoted by most buyers is a higher price in comparison to cash purchases.
Mrs Kamau, for instance, paid almost twice the cash price of a refrigerator when she opted for a hire purchase agreement. However, this was a result of a lengthy hire purchase agreement. Buyers opting for shorter hire purchase contracts enjoy low-interest rates.
Learn more about hire purchase on our blog. Visit Kenya Credit Traders‘ Facebook page for the latest hire purchase deals.
