How does 'Pay By Finance' from Hitachi work?

[montymint]

@Stephfox It's really common for all Buy Now, Pay Later to include a stipulation that if you do not settle the full amount i nthe X months, you have to pay the interest (pre calculated), here's my paper work for a build I did for my partner for lockdown:

Edit: to be clear, the £700 interest with Hitachi is NOT for one year. It's pre-calculated for the entire term of the loan, so you will see an outstanding balance of your purchase + the £700 interest. This is so hitachi can give you a fixed monthly repayment plan. So had I not paid my loan above off before the 12 months, I'd have commited to 36 months of payments @ X pounds pm.

Here's trying to by from a competitior:

 

[Deleted member 77746]

So you signed a loan agreement without checking the interest rates?

That's the only thing to be 'gobsmacked' about in all honesty.

It doesn't say anywhere they signed a loan agreement. OP asked some questions that's all.

 

[Josh]

It doesn't say anywhere they signed a loan agreement. OP asked some questions that's all.

I wasn't responding to OP, I was responding to post #17.

Be on your merry way sir white knight.

 

[montymint]

It doesn't say anywhere they signed a loan agreement. OP asked some questions that's all.

It's in response to another poster I believe

 

[Deleted member 77746]

It's in response to another poster I believe

ah quote post required

 

[Hotwired]

Hitachi pay by finance fixed term deferred loans e sign on application but no mention of how much in years time interest is which is £700! I’m gobsmacked how this is happening emailed but no reply from them has anyone else had this?

Had what.

This is what you see when you ask for buy now pay later.

Says right there in the calculation (which you can adjust using the slider at the top of the screen for your deposit) how much you pay in interest if you don't pay in full by the agreed day.

 

[Deleted member 77746]

Holy Heck! That's a lot of interest. I recommend nobody gets that finance deal but it's up to you.

Loan Value - £1806.35
Total Repayable - £2806.09

Ouch!

 

[montymint]

Holy Heck! That's a lot of interest. I recommend nobody gets that finance deal but it's up to you.

Loan Value - £1806.35
Total Repayable - £2806.09

Ouch!

20% per year for 4 years, what else would you expect really?

 

[Orangeade]

If you can't afford it, really consider if you should be buying it. Why not save up for it instead?

 

[tlrBeta]

fairly sure there's credit score/affordability checks for any finance

google says there's some 'buy now pay later' options that won't do credit checks but the balance is due in 4-6 weeks for those, rather than months

Yep your correct and it isn't widely known, Buy Now pay in instalments don't have to by law e.g. Klarna. They don't even age check!

I'm sure the FCA will close that loop asap.

On this specific thread, 20% apr, your crazy to even consider it. Get a credit card, transfer balance to bank account and pay the one off fee. Interest free from that point for X months.

 

[Diddums]

ah quote post required

Reading comprehension required

 

[arknor]

Yeah it will depend on the loan arrangement. I tend or research properly before committing. MSE loan section is pretty good for that.

I wouldn't take a loan where interest is front loaded. Unless it was for a tiny amount where the interest is negligible.

yea but most people won't research it which is why that person brought it up.

it's a tactic that's quite common, people think oh I just pay it off early, less interest and then realise what they signed up for.

On this specific thread, 20% apr, your crazy to even consider it. Get a credit card, transfer balance to bank account and pay the one off fee. Interest free from that point for X months.

if a person needs to buy a pc on finance then the odds of them getting a credit card with less than 20% apr is probably slim?

According to data from the Bank of England, the average credit card interest rate in the UK was 20.77% at the end of 2019

that's average.... people with less credit score are going to be hit for 25% apr or worse

 

[Deleted member 77746]

Reading comprehension required

nah I think I'll pass.

 

[Diddums]

nah I think I'll pass.

Demonstrably evident

 

[montymint]

On this specific thread, 20% apr, your crazy to even consider it. Get a credit card, transfer balance to bank account and pay the one off fee. Interest free from that point for X months.

If you know you can pay it back within the 12 months it's 6 and 2 3's really. The interest on the first 12 months is deferred and it waived if you pay it off.

 

[tlrBeta]

if a person needs to buy a pc on finance then the odds of them getting a credit card with less than 20% apr is probably slim?

Not sure i would agree,

How people manage their money varies widely. Not all credit use is bad and shows lack of cash.

Nobody knows the ops position, why do we all buy sofas on finance? Because we can.

 

[arknor]

Not sure i would agree,

How people manage their money varies widely. Not all credit use is bad and shows lack of cash.

Nobody knows the ops position, why do we all buy sofas on finance? Because we can.

I'm not sure we all do. op probably has almost non existing credit history unless he has bills in his name, like virgin etc.

it's not seen as a good thing usually like you would expect

 

[tlrBeta]

op probably has almost non existing credit history unless he has bills in his name, like virgin etc.

it's not seen as a good thing usually like you would expect

Not suggesting it is and yes i would agree sounds quite early in the journey

 

[Frubeling]

Holy Heck! That's a lot of interest. I recommend nobody gets that finance deal but it's up to you.

Loan Value - £1806.35
Total Repayable - £2806.09

Ouch!

Honestly though why would you choose to go with 12 month deferred payment if you don't think you're going to pay off in the 12 months?
As long as you actually settle before then it's not ouch in the slightest

 

[m@rty]

So you signed a loan agreement without checking the interest rates?

That's the only thing to be 'gobsmacked' about in all honesty.

Perhaps quote next time if you aren’t referring to the OP