While spreading the cost of your new bed could be helpful, it’s wise to know what you’re getting yourself into before you sign off on it.
What a Pay Monthly Agreement Is
Beds are sold on a pay monthly basis, with the retail price of the bed being borrowed and repaid by the customer in fixed monthly payments over a set period of time (typically 12-48 months). The retailer has arranged credit for the customer with a lender, and customers repay the retailer directly.
Interest-Free Versus Interest-Bearing
You need to check for interest on Pay Monthly Beds. Some offer interest free credit but others will start to charge you interest straight away, even at high rates such as 30% + APR. Make sure you read the APR before signing the agreement.
Credit Checks and Thin Histories
Most lenders carry out a hard credit search as part of their lending process. These searches remain on your credit file for 12 months. If you have a thin credit history, you may be offered higher interest rates or even refused credit altogether. If you want Pay Monthly Beds, https://www.simplypayweekly.co.uk/pay-monthly-beds/ is a good place to start.
Reading the Small Print
Make sure you know the minimum term of the agreement, any early settlement charges and any penalties for late payment as regulated by consumer credit legislation.
Comparing Total Cost
Compare the total cost of repayments to the original price of the bed if you were to buy it outright. Even if the difference is only moderate and you really need a new bed right now then spreading the cost to pay monthly will be cost effective in the short term. However, if the difference is large then it may be more cost effective in the long term to save up and buy the bed outright.
Just take a few minutes to run through the numbers before you commit to buying the bed.
