Somebody help me with finance! This is confusing!

MrElve

MrElve

MrElve

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Joined
28 Jul 2010
Posts
662
Location
Grimsby, Lincolnshire.
Hey all,

I'm getting my brand new camera tomorrow for my photography studies over the summer but I'm going to be getting it on a 'buy now, pay later' finance thing which essentially works as I get the camera tomorrow for free, and if I pay the money back in full at any point within 6 months I don't pay interest, Or at least I think anyway.

The website says;
____________________________________________________

-Enjoy no payments or interest for the 6 month promotional period - nothing is backdated

-Choose either to pay the balance in full completely free of interest (early settlement charge of £25 applies).

-Or spread the cost over 3 years and if, at any stage during the loan, you have the money to pay it off in full, you can.

We currently offer buy now pay later over 6 months. Here's an example of how this plan could work for you:

<goes on to explain about how a 48 month monthly payment loan would work which doesn't apply to me>

____________________________________________________

Am I right in thinking what I thought at the start of the post? Pay it all back within 6 months at any time you like and you don't pay interest?

This is confusing the life out of me!

Thanks OCUK,
-Elve
 
snowball1 said:
You will just pay the 25 quid if settled within 6 months, they hope you will forget, then they sting you for the interest.
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Ahhhhh I see, so when I get it I have it for free for 6 months. When the 6 months is over I can either pay the full amount + £25 to get it paid off entirely, or begin a pay monthly loan? Because I thought I'd be able to pay it off earlier than the 6 month period (september) so it's all done and dusted, if that requires a £25 early fee then I honestly don't mind. I don't want to get on any pay monthly for 4 year rubbish.

Am I correct in thinking that?
-Elve
 
MrElve said:
Am I right in thinking what I thought at the start of the post? Pay it all back within 6 months at any time you like and you don't pay interest?
Click to expand...

Yes, well I suppose the £25 could be looked as 'interest' but it's very small compared to what you would be paying over the longer period :)

There's always a one off admin fee or those early payment fees so that they make something out of it.

MrElve said:
Ahhhhh I see, so when I get it I have it for free for 6 months. When the 6 months is over I can either pay the full amount + £25 to get it paid off entirely, or begin a pay monthly loan?

Am I correct in thinking that?
-Elve
Click to expand...

No you pay it before the 6 months, as soon as it hits 6 months exactly you'll be paying interest on it.
 
MrElve said:
Ahhhhh I see, so when I get it I have it for free for 6 months. When the 6 months is over I can either pay the full amount + £25 to get it paid off entirely, or begin a pay monthly loan?

Am I correct in thinking that?
-Elve
Click to expand...

Yes. Well that was a short thread.
 
Thanks for the help guys. Yeah it was a short thread, I guess I just made a simple thing a bit too complicated in my own mind. Thanks anyway :)
-Elve
 
Canon 550D w/ 18-55mm IS kit lens. In January I'm planning on getting an L lens and a telephoto :). I already have my own memory card, tripod, bag, battery grip etc. bought in advance for this very day :D

EDIT: That was me on Flickr that added you ^^
 
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Make sure you do pay it off, the agreement will state (as they all do) that the full interest will become due on the first day of the repayment period. If you cross that threshold nothing you can say or do will prevent you from paying the entire interest charge (at some ungodly rate) plus the purchase cost.
 
LOAM said:
Make sure you do pay it off, the agreement will state (as they all do) that the full interest will become due on the first day of the repayment period. If you cross that threshold nothing you can say or do will prevent you from paying the entire interest charge (at some ungodly rate) plus the purchase cost.
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6 months will mean I'll have up until December before that massive interest % kicks in, I'm paying it in September, that's definite and confirmed. I won't touch this interest thing, other than the £25 early charge fee :)
 
These deals are generally naff.

The 'fee' is really interest. Lets say its a £500 camera and you want to pay it back in 6 months time to get 'no interest'. That £25 fee to borrow £500 for 6 months is actually an APR of 17%. Pay it back in 4 months and the APR is 24%! This is no better than the average credit card!

It's just rubbish, just buy it on a decent credit card and be done with it. Less hassle. Plus if you get a credit card offering 0% on purchases then you really will benefit from no interest or charges.
 
[TW]Fox;22135845 said:
These deals are generally naff.

The 'fee' is really interest. Lets say its a £500 camera and you want to pay it back in 6 months time to get 'no interest'. That £25 fee to borrow £500 for 6 months is actually an APR of 17%. Pay it back in 4 months and the APR is 24%! This is no better than the average credit card!

It's just rubbish, just buy it on a decent credit card and be done with it. Less hassle. Plus if you get a credit card offering 0% on purchases then you really will benefit from no interest or charges.
Click to expand...

I had never thought of that...
 
Following on from Fox's illuminating figures...

If you're going to pay it off in September you're best off paying with your credit card, and paying the balance in full with your overdraft... that way you avoid having to deal with a finance company and the spectre of them hitting you with an interest charge because of some mistake or slight understanding.

You get 30+ days interest free on virtually all credit cards for purchases. So you'll start paying overdraft interest at some point between mid July and August, and pay it off in September, meaning you'll pay between 1 and 2 months interest on it.
 
Personally I like to avoid ever borrowing money like the plague. The only thing I would ever borrow for is to buy a house, and that's because they're so unbelievably expensive through market inflation by the banking sector, that really there is no alternative.

Rgds
 
radderfire said:
they're so unbelievably expensive through market inflation by the banking sector
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The reason houses are so expensive is because there is a lack of supply. It's nothing to do with the banking sector. You could perhaps make that argument in 2007 when some lenders were giving out loans that they should not, which was putting far too many people into the market that shouldn't be there.

If anything you could argue that the banking sector is suppressing house prices by being too risk averse with secured lending.
 
MrElve said:
Canon 550D w/ 18-55mm IS kit lens. In January I'm planning on getting an L lens and a telephoto :). I already have my own memory card, tripod, bag, battery grip etc. bought in advance for this very day :D

EDIT: That was me on Flickr that added you ^^
Click to expand...

Nice :D

Don't rush out and buy L glass until you know exactly what you want to take photos of and develop a style, or it can be bloody expensive experimentation!

Recommend a second hand 70-200 F4L though if you fancy a quality telephoto as they can be had for pretty damn good prices second hand.
 
The Halk said:
Following on from Fox's illuminating figures...

If you're going to pay it off in September you're best off paying with your credit card, and paying the balance in full with your overdraft... that way you avoid having to deal with a finance company and the spectre of them hitting you with an interest charge because of some mistake or slight understanding.

You get 30+ days interest free on virtually all credit cards for purchases. So you'll start paying overdraft interest at some point between mid July and August, and pay it off in September, meaning you'll pay between 1 and 2 months interest on it.
Click to expand...

I'm confused. The camera in total is £530, add on a £25 charge, i'll pay £555 off in September. I'll have that money in september so I'll pay the whole £555 in one big go and then it's sorted and fully done. I don't have to pay any interest or any of this monthly stuff or use a credit card because it'll be done within the 6 months. Where is all this other stuff coming from like pay with a card or i'll get 27% interest or something... because it's confusing me even more...?
 
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