Hire Purchase Loans are handy for buying assets such as vehicles, equipment, machinery and office equipment.
What Types Of Assets Can I Buy On Hire Purchase?
What Are Hire Purchase Loans?
What Are Some Of The Advantages And Disadvantages?
What Hire Purchase Loans Does The Government Offer?
What Types Of Assets Can I Buy On Hire Purchase?
- You can use hire purchase to buy motor vehicles, computers, industrial machinery, equipment and furniture.
- They are generally used for fixed assets i.e. assets that cannot be easily converted into cash.
back to top
What Are Hire Purchase Loans?
- A hire purchase loan is another way to finance purchasing of fixed assets.
- You basically buy an item on hire purchase - you make regular payments for the asset over a fixed period of time.
- Only when all the payments are made does the asset belong to you. Before that, the asset belongs to the seller.
- To finance your monthly repayments, you can take out a loan. This is a hire purchase loan.
back to top
What Are Some Of The Advantages And Disadvantages?
Advantages
- You do not need large amounts of cash to buy an asset.
- The seller is more willing to allow you to make small regular payments as the asset stays in his/her ownership until you have made all the repayments.
- As the repayment amounts are fixed, it is easier to budget and manage your cash flow.
- Hire purchase loans are handy for businesses who are buying assets that do not qualify for Fixed Asset Loans.
Disadvantages
- You end up paying more for the asset than you would have if you paid outright. On top of that, you have to service the interest on the loan.
- The seller can take back the asset if you fail to make a scheduled repayment. This is true even if you have already paid a substantial amount for the asset.
back to top
What Hire Purchase Loans Does The Government Offer?
back to top