Did you know that 67% of married individuals lived with at least one partner before marriage?
Your partner’s previous intimate relationships probably isn’t something you want to think about while you’re preparing a new home for the two of you. How to acquire good furniture and appliances on a limited budget, however, probably is.
That’s where lease-purchase programs, or lease to own programs, come in handy.
Lease-purchase programs are payment plans that allow you to purchase high-quality, brand-new merchandise such as furniture, electronics, and appliances with regular cash installments.
This way, instead of paying for everything you need for your new home all at once, spending a huge amount of cash up-front, or incurring massive debt to credit card companies, you can get the merchandise you need right away, and pay for it in manageable chunks over time.
This is a popular option among moderate-income consumers, and the Internet has made it so easy to find lease-to-own programs.
Benefits of Lease-Purchase Programs
These are some of the incredible advantages of such programs:
– Own brand-new, name-brand products — without spending an arm and a leg up-front.
– Return an item at any time if you no longer need or want it — there’s no obligation to make another payment, which is helpful if you suddenly run low on funds.
– Unlike taking out a loan, there’s no credit check, and bad credit histories or bankruptcies won’t impact your eligibility.
– You can miss a payment without endangering your credit score. Since the program isn’t based on credit, missing one payment won’t negatively affect your score.
– Improve your credit score with on-time payments—even though missing a payment won’t affect your score negatively, making your payments on time can actually help you build a positive credit history.
– Get lifetime reinstatement. At most businesses offering lease-purchase programs, if you suddenly have to return an item because you can’t keep paying for it, if you rent the same item again, the money you’ve already paid towards owning that item will still apply. This way you don’t have to start over from day one.
– Get new furniture for a new living space. If you’re only going to be in an area for a few months, it wouldn’t make sense to buy new furniture for your apartment. Lease-purchase programs come in handy here, too.
– Buy your kids great gifts without worrying about whether they’ll get tired of them. If yours are the kinds of kids who quickly get bored with new things, you can lease electronics and musical instruments without making the full investment up-front.
– Temporarily replace your appliance while it’s being repaired. This way, you don’t have to live two weeks without a fridge while yours is repaired.
Other options similar to lease-purchase programs include in-store credit and layaway.
In-store credit is a special loan that’s financed by the dealer. Unlike lease purchasing or layaway programs, these loans do incur interest and are usually contingent on a successful credit check.
Layaway programs involve the customer making a weekly payment to the store, allowing the dealer to hold their money for them, until they’ve set back enough to buy the product. In the meantime, the store puts that product on hold — literally “laying it away” — until the full amount has been paid by the customer.
Unlike lease purchasing or in-store credit, however, you have to wait until you’ve paid the full amount to take home your product. The upside to layaway programs is that, in the long run, you usually end up spending dramatically less than you would with either credit or leasing. However, when you need new merchandise right away, layaway programs aren’t helpful.
Is Lease Purchasing Right for You?
Typically, leasing something to own it ends up being somewhat more expensive than it would have been just to buy it outright. However, that doesn’t make it a bad idea.
Appliance financing, furniture financing, and electronics financing through lease purchasing programs can be a great choice for you. Many companies offer early payment options, which could be helpful if you end up with a bigger income than you expected and want to pay off your merchandise faster.