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A Guide on Lease-Purchase Financing


Attaining the American dream is easier said than done. This is a result of the ever-rising cost of living. People have to work extra hard just to make ends meet. You need more money for food, healthcare, electricity, and a myriad of other monthly expenses.

Once you clear utility bills, make your mortgage payments, and pay your taxes, hardly any money remains for other purchases. Fortunately, with lease financing, you can buy furniture, kitchen appliances, and so much more. This article will try to show what makes lease-purchase financing a sound and reliable financing option.

Lease Purchasing Financing Explained

Have you ever leased a car, a gown, a lawnmower, or other items for short-term use? If so, then it should be easy to understand the concept of lease to own programs.

Lease-purchase financing refers to a purchase agreement whereby a buyer pays the seller fixed monthly installments for the use of an item. Full ownership of purchased items only occurs upon completion of all payments stipulated in the contract. In most lease to own programs, the final installment is usually larger than preceding monthly payments. The example given below illustrates how lease-purchase financing works.

The Lease-Purchase Financing Process

Consider a scenario in which you are looking for water heater financing. You begin with visits to major HVAC equipment dealers who often offer multiple HVAC financing options to prospective clients. You will then have to pick a dealer who provides a lease-purchase agreement with a long repayment period. This is beneficial since lease to own agreements with extended repayment periods require lower monthly Installments. Furthermore, you will end up paying a smaller final payment by opting for extended water heater financing.

Lease-Purchase Financing Programs

These option has become so popular that lenders have come up with standard lease-purchase financing products. Appliance financing, furniture financing, and jewelry financing are three standard lease-purchase financing options availed by major lenders. However, lenders require that the items meet pre-qualifying specifications before approval.

For example, some lenders require Energy Star certification on all electronics bought via lease-purchase. This particular requirement ensures that items purchased via this financing option are of certifiable quality. Furthermore, these appliances are energy efficient and can cut power consumption by an average of 10% to 50%. All in all, pre-qualifying requirements on lease-purchase items are for the benefit of both the buyer and the lender.

Benefits of Lease-Purchase Financing

The most immediate benefit of lease to own programs is that you are able to acquire an item without a substantial initial cash investment. The contracts offered by most lenders do feature affordable monthly installments. These monthly payments usually have a fixed rate which ensures that they remain constant during the repayment period.

Another benefit of financing can be seen when it comes to paying taxes. U.S. tax laws recognize lease-purchase agreements as a medium-term financing option. This means that you can declare payment obligations for this financing option as an expense. You end up paying lower taxes when you purchase items via this purchasing model.

Finally, lease to own programs features a fast approval time when compared to other medium-term financing options. For example, it is possible to walk into Okinus stores for water heater financing and walk out with your desired heater in less than an hour.

Contact Okinus today

Lease-purchase financing offers you the opportunity to purchase new items without a large initial cash deposit. Furthermore, the fast turn-around time offered by these agreements eliminates long-waiting periods. When you’re ready to learn more, don’t hesitate to reach out to Okinus today.