Rent to Own
Pros
- Instant gratification
- No money down
Cons
- Considered a weekly or monthly contract so if you’re late with even one payment they can cancel your contract and all the money you paid towards it could be lost
- Pay much more than merchandise is worth
- Interest rates run about 75% – 350%
- By the time you pay it off it may be outdated, worn out or broken
Rent To Own
Example
Rent to own sale of $250 TV:
Amount financed: $250
Weekly payment: $13
Number of weeks: 78 [18 months]
Finance charge: $764
Total of Payments: $1,014
APR: 265%
Department Store Sale of $250 TV:
Amount financed: $250
Monthly payment: $16.17
Number of months: 18
Finance charge: $91.06
Total of Payments: $291.06
APR: 19.8%
Excess dollars paid if you buy at Rent to Own: $723 –enough for apx. 3 additional TV sets!
Alternatives
- Purchase the product or put on layaway plan at store
- Craigslist
- Thrift store
- Garage sale
