Flexible lease-purchase programs are attractive alternatives to other financing options in buying home items. With over 68 million Americans having a bad FICO score, it may be hard to approach traditional banks to finance your new furniture or electronics acquisition. Flexible lease-purchase programs allow you to bring home what you want, despite your poor credit score.
What Is a Lease-Purchase Option?
A lease-purchase program is a financing contract between a vendor and a customer. Both parties set the price for the item upfront, and the consumer completes the purchase in the future through installments. In exchange for taking the items home, the seller sets a substantial option fee above the market rate.
Lease-to-own programs are perfect for consumers who are rebuilding their credit score. However, taking on lease-purchase programs without due diligence is not a good idea. As a savvy consumer, here are four pitfalls to avoid when working with leasing programs.
1. Not Researching the Lease Program Provider
You need to work with reputable vendors to ensure that you do not lose out on the property before completing all the payments. Flexible lease-purchase programs have multiple facets. Make sure that you understand all aspects before signing the agreement.
You can weed out scrupulous dealers by checking the provider’s reputation. What do past leaseholders say about their services? How long has the lease-purchase provider been in business? You can get a closer idea of what to expect before agreeing to the contract.
2. Forgetting the Fine Print
With the human attention span dropping to less than eight seconds, it is easy to see why most consumers would scroll through the terms and conditions page. Skimming past your contract details can be costly. You may end up agreeing to punitive clauses hidden within the fine print. Take time to read through every line, ensuring there are no loopholes that come to bite you off later on. For larger transactions such as furniture financing, you may have a legal professional go through the contract to ensure all your interests are protected.
3. Being Unsure of Your Finances
Flexible lease-purchase programs offer varied options, including no down payment options, early payment options, and low monthly payment plans. Take time to analyze your financial position and budget effectively. Can you afford to make regular monthly payments using your income structure? Make sure you get your numbers right on how much you should pay each month.
4. Giving Incorrect or Scarce Information During Your Application
Flexible lease-purchase programs allow consumers to own vital home products despite their bad credit history. While the approval process is far less stringent than in other financing options, you may need to convince the provider to offer the lease option. Ask the vendor what documents are necessary during the application process and try to avail them all. Providing the correct and enough information can help speed up your approval.
Leasing purchase programs enable consumers to access products they require as they try to rebuild their credit. Conducting due diligence before signing the lease agreement can help you avoid regrets later on. Feel free to reach out to our team at Okinus Credit Solutions for more information on lease programs.