Buying Furniture
2006-11-21 05:13:08 · 7 answers · asked by fransheze808 1 in Business & Finance ➔ Credit
If you dont pay the loan IN FULL before 2008, all the interest that would have accrued will be added and due at that time.
Something that fools people allthe time.....
2006-11-21 05:17:27 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Some very good answers you've gotten here.
These types of financing projects vary from place to place, from lender to lender etc.
The furniture store is not paid 100% on these contracts from the lender. And that means you will not get a price reduction as though you were paying cash.
For example - a $1,000 couch - financed under the terms you mention might be cut by 10% when the lender pays the furniture store. Hence, the store actually only receives $900 for the item. The other $100 the lender will collect from you in lieu of interest.
All perfectly good & legal.
HOWEVER - should you be able to afford to pay cash - you could buy the couch for only $900.
The furniture store gets the same money & has no paperwork to fill out!
Pay cash.
2006-11-21 23:33:42 · answer #2 · answered by chey_one 3 · 0⤊ 0⤋
The catch is that the furniture is going to cost more to cover the loss in interest.
Make sure that there will actually be a revolving account after 2008. In some promotions you must pay the balance before 2008 or you will pay interest for the entire period
2006-11-21 13:20:16 · answer #3 · answered by Barkley Hound 7 · 0⤊ 0⤋
As adverttised, the merchant sell the merchandise and no payments are due until the specified date. If the terms include no interest then no interest is due.
The merchant sells the contract to a lender at a discount. Assume you buy $1,000 worth of merchandise. Dependant upon the merchant/lender agreement the lender would buy the contract for a reduced amount. For example, $800. The merchant has his cash up front, the lender has made 20% on his money.
When the payment is due, if the customer does not pay the entire balance and elects monthly payments the lender collects them with a finance charge accruing. Very lucrative for the lender, the merchant gets his cash, you get your merchandise, everyone is happy.
2006-11-21 13:19:52 · answer #4 · answered by mick 1 · 0⤊ 0⤋
They technically will not charge you interest and you are not required to make a payment until 2008. However, the catch is if you do not pay it off in full by 2008, all of the accrued interest is suddenly tacked on. Not a good deal unless you will pay off the entire balance before 2008
2006-11-21 13:19:10 · answer #5 · answered by his temptress 5 · 1⤊ 0⤋
It means that you really don't have to make a payment and they will not charge you interest in that time period. The catch is that if you don't make any payments they will go back to the beginning and add your interest charges on the balance. This will only work if you pay off the furniture during that year with NO late payments.
2006-11-21 13:18:35 · answer #6 · answered by country girl 5 · 0⤊ 0⤋
No interest and no interest payment are different.
If no interest, there is not really a catch except that usually you will pay full price for the product.
No interest payment means that the interest is still accumulating and it will be part of your balance due when you start paying in 2008.
2006-11-21 13:17:02 · answer #7 · answered by ignoramus 7 · 0⤊ 0⤋