What is the rent to own?

For many consumers with poor or non -existent credit historians that own large items of tickets such as furniture, electronics or cars may seem like a dream. Qualified buyers can often obtain low -interest loans from banks to finance these purchases, but others can only qualify for paying high interest prices each month. On the basis of traditional rental agreements, there is no sense of ownership. If the lessee cannot make a rental payment, the item is postponed by the owner. This arrangement begins as a traditional rental agreement, but both parties agree to transfer ownership at the end of the specified time period. The Seller benefits from higher monthly interest rates paid for the item, while the buyer benefits from less restrictive credit qualifications. The consumer with poor credit history may usually enter into a few links and proof of permanent employment.

Rental critics point out that buyers are often forced to pay an interest rate bordering on illegal usual. For example, the USD TV set (USD) $ 500 (USD) could end in that the buyer costs nearly $ 1,200 in total payments. Because these monthly payments are usually less than equivalent banking loans, buyers do not always feel a pinch. The seller can afford to get lost occasionally until those who stay in the program continue until the end. Repossessed items can always be sold again.

Not all rentals offer rent for their own plans. Many of their customers are satisfied with paying monthly rental fees instead of fearing payments for bank loans. Rent for their own arrangements tend to address those customers who would have great difficulty in obtaining household loans from banks, but you do not want to pay for property that never owns. Through higher interest rates and unfavorable conditions will beThese customers eventually take over ownership rights to their purchases. An alternative could be the purchase of inferior or used goods with available cash or enter other loans with high interest with credit institutions.

Some products such as furniture and electronics are well rented to their own arrangement. The quality is usually high and the total number of payments required for ownership is low. Danger comes with very expensive objects such as plasma TVs, jewelry or cars. The number of payments required for ownership may be excessive and re -receipt may prove to be particularly expensive. The rent for their own arrangement is not illegal, but consumers should be aware of all hidden costs and conditions before signing on a dotted line.