I want to pay the smallest deposit and have the lowest payments- what is the best product for me?
Hire Purchase with a Balloon is similar to Hire Purchase but with lower monthly repayments since a significant repayment of the amount of credit is deferred to the final payment. This final amount is known as a balloon payment or residual rental.
What does APR mean?
APR stands for the Annual Percentage Rate of charge. You can use it as a benchmark against different credit and loan offers. The APR takes into account not just the interest on the loan but also other charges you have to pay, for example, any arrangement fees.
If I take finance on the car does that mean I am the legal owner?
Only when all payments under the agreement have been made, including any balloon payment, do you become the outright owner of the vehicle as the finance company hold an interest.
Are your interest rates fixed?
The interest rate is fixed on a fixed rate agreement so you’ll know exactly how much you’ll repay from the start of the agreement
Is it your money or finance company?
The money is lent by the finance company
What is the difference between PCP /HP?
Hire Purchase :
After paying the initial deposit you make regular monthly payments to cover the amount borrowed plus any interest and fees
After paying the initial deposit you make regular monthly payments to cover the loan but with additional flexibility since part of the cost is deferred until the end of the agreement which may give you the benefit of lower monthly payments. The deferred amount is known as the Guaranteed Future Value (GFV) sometimes known as Optional Final Payment.
What happens at the end of a PCP agreement?
At the end of the agreement you have three options:
1. Retain the car: simply pay the Guaranteed Future Value, and the car is yours.
2. Renew the car: choose another car, using any excess part exchange value that is above the Guaranteed Future Value towards your deposit.
3. Return the car: there’s nothing more to pay if the car is in good condition and within the agreed mileage terms.
What happens if I settle early?
This type of agreement is covered by the Consumer Credit Act 1974, which means you can settle early by repaying the calculated settlement balance at any time during the agreement. All Finance Houses are obliged to chare 58 days interest.
Can I make over payments? What happens if I do?
Yes, you can pay off lump sum amounts during the agreement which will reduce the monthly payments, not the term or the balloon payment.
How long does the process take?
Once we have your proposal details the process will usually take 2 hrs to initial decision. The process can take a little longer if any further information is requested by the lender. On average it takes 2 days from proposal to pay out.