No Down Payment: Buy Now, Pay Later

2007-03-08 10:33:40

( Financial )



PAY LATER PLAN

There are many things that we can purchase on an installment or staggered periodic payment basis. Most of these are major purchases that would be very expensive if bought with cash like cars, appliances, and properties.

Usually a periodic payment purchase involves some form of initial down payment. However, the trend nowadays is moving towards a no down payment scheme. No down payment scheme encourages more buyers to make purchases because the previous initial down payment requirement was the main reason why most consumers are hesitant to make buying decisions.

Under a no down payment scheme, the full price of the item plus additional interest is broken down into periodic payments. The length of time can be six months to five year or more, depending on the item bought. A shorter payment period has lower interest rate charges, but higher payments. If you can afford to pay the dues on a shorter payment period, go for it because you end up saving more by keeping the interest charges low.

BETWEEN NEED AND WANT

A no down payment plan is more commonly seen in appliance purchases. While appliances are purchases involving a significant amount of cash, their prices are not too high so as to necessitate a down payment like the case with houses and some types of cars. Most people would still prefer to make down payments on houses and cars in order to significantly reduce the periodic payment amount they have to make on a regular basis.

Our society has thrived on a buy now, pay later scheme. In fact, most of our life’s necessities and conveniences and have been acquired this way. A no down payment plan is one of those innovations that can lead you to believe that you need more than you really do. A no down payment scheme can blur the line between a want and a need. While there are really some purchases that you need, make sure you can sift them from the ones that you don’t.


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