All of the major kitchen retailers offer finance deals to help consumers fund the purchase of a new kitchen. However, as with any financial product, the deals can offer significantly and it’s really important to check and compare the detail before entering into any loan agreement. The first thing to look out for is whether the retailer is offering a genuine ‘Interest Free Credit’ agreement, a ‘Buy Now Pay Later’ deal otherwise known as a ‘Deferred Interest agreement’ or a standard interest bearing loan agreement with a fixed interest rate.
Interest Free Agreements – An ‘interest free agreement’ is exactly that, an agreement where you don’t pay any interest at all, the value of the balance borrowed is divided by the number of payments or period in question, such as 6, 12 or 24 months.`
Buy Now Pay Later Agreement – It’s important that these are not confused with true interest free agreements, as there is a risk you can get caught out. With a ‘Buy Now Pay Later’ Agreement, you often pay nothing for a specific period, such as 12 months and wording such as ‘Take a 12 month payment holiday’ or ‘Buy Now Pay 2015’ is used. Normally, there is a minimum qualifying spend for this type of agreement, which starts at around £1,000, but can be as high as £3,000. At the end of the initial period, you can pay the loan off, without being charged any interest (normally just a small settlement fee in the region of £30). However, many consumers get caught out and forget to make the final payment by the required date and when this happens, interest is charged back to day 1 of the loan, which can be very expensive. Surprisingly, there is no legal requirement for a retailer to notify a consumer that he or she is coming to the end of the interest free period.
Interest Bearing Loan – Many retailers also offer standard loans over a fixed period, such as 2 to 5 years, which carry a fixed interest rate. To see more information on the interest bearing loans, click on the retailer links at the foot of this page.
|Finance||Interest Free Credit||Buy Now Pay Later||Interest Free Credit||Interest Free Credit||Buy Now Pay Later||Interest Free Credit|
|Deferred Term||n/a||12 months||12 months||n/a|
|Repayment Term||Up to 3 years||3-5 Years||Up to 2 years||Up to 2 years||Up to 5 years||Up to 4 years|
|Deposit required||10% Deposit||No Deposit||£10 Deposit||20% Deposit||£100 Deposit||n/a|