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What are the advantages and disadvantages on paying by hire purchase?
Wiki User
∙ 12y ago
When purchasing a big ticket item on the instalment plan, one can avoid a major layout of cash up front. Instead, the payments are divided by the length of the term and are therefore smaller. Another advantage is that you get to possess the item immediately.
The disadvantages are that you will have to pay a premium in the form of interest on the unpaid balance until the loan is paid off. If you default on any of the terms of the loan, the seller has the option of repossessing the item.
Things to watch for:
1. Don't enter into any agreement with Rent to Own companies. Their loan structure is prohibitive. You will pay more than twice the value of the merchandise.
2. Watch out for the interest rate. Find out how much the cost of the loan will be overall.
3. Beware of late payment charges. Educate yourself about simple interest and compound interest. When you are late making a payment, some loan agreements will begin charging you compound interest. Ignorance of the effects of compound interest on your unpaid balance can end up costing you more than you originally borrowed.
Think of credit as a double edged sword; used responsibly it can be a boon. Used irresponsibly, it can suck you into a morass of debt.
Wiki User
∙ 11y ago
Wiki User
∙ 12y agoAs with everything, there are advantages to leasing or buying. If you plan to stay in one place for 5 or more years buying is likely the best option. If you plan to move in the near future, then consider leasing.
Wiki User
∙ 15y agothe advantages of hire purchase : * can save the business money * you can set your own rates the disadvantages are : * many people may not want to hire but to buy instead
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What are the advantages and disadvantages of hire purchase?
someone answer it!
What are the Advantages and disadvantages of hire purchase as a source of business finance?
Hire purchasing helps customers to buy articles at instalments through EMI,instead of paying lumpsum at a time.However, there are chances of pushing inferior articles through hire purchase by sellers. Even the customers may default and/or delay payment of instalments leading to litigation.
Hire purchase?
Paying in instalments
What are the advantages of hire purchase as a source of finance?
Hire purchase can give the good profit,
What are advantages of hire purchase?
There are several advantages of hire purchase. Some of these include having the specific item that you want, and owning something you typically cannot afford.
Advantages and disadvantages of having money?
Well the advantages of having money is that you can pay your bills, people will respect you more and can hire business.
What are the disadvantages of hire purchase to a home maker?
you end up paying more than the original value. If you miss the payments of instalment, you lose the item plus what you have already paidyou will be paying it back for a long timeIf you break or misplace the item, you still have to pay for it as well as having to replace it.
Advantages and disadvantages of virtual office?
Advantages of Virtual Office is you can hire many part-time workers. Less expenses for office rentals, tax exemptions, facilities for your employees. While the disadvantages are communication with your workers, physical meeting and physical location of the business.
The new idea of buying now and paying later was known as?
In the UK this is/was called hire purchase and was nicknamed buying on the never-never.
What are the disadvantages of sale and leaseback?
The disadvantage of a hire purchase (or installment plan) is that you always end up paying more. This is the fee for effectively borrowing the money over time. You have to keep up payments or you may lose the item altogether.
What is the difference between hire purchase and bank credit?
With bank credit, you are buying it - and making monthly payments to the bank which loaned you the money. With hire/purchase, you are buying it on a month-by-month basis, and paying the person who owns it once a month, until it is "paid off" and you then own it. Surprisingly, "hire/purchase" frequently turns out to be the more expensive of the two in the long run.
When was the Origin or development of hire purchase?
origin and development of hire purchase
