No credit checks! No down payments! Pay in affordable instalments, every week or every month!
These are some of the things that you hear when a place is offering rent to own furniture, and they’re certainly not lying.
For anyone who needs important things like furniture, but don’t necessarily have the full amount of cash or credit on hand to buy, a rent-to-own paying scheme is your best, and sometimes the only option.
The way these deals are structured is that they collect weekly or monthly payments, and if you happen to make all of your payments, you get to own the item once the contract ends. Typically, contracts can last for anywhere between 12 and 24 months, usually no shorter than 12 months, and the longer the contract is, the more you’ll end up paying, just that you’re paying it all in smaller increments over a longer period of time.
How Does Rent to Own Furniture Work?
Let’s take, for example, you’re buying a sofa for $250.
It’s not expensive, but you don’t have the money for it yet. So, the furniture shop offers to sell it to you via an instalment plan. Instead of paying for it $250 up front, you instead make weekly payments of $8.50 each for 78 weeks.
Now, that doesn’t seem much, does it?
In total, you pay $700 for that same sofa in 18 months, which is now a lot, since it’s nearly double the price of the sofa. However, then point of rent to own furniture isn’t to look at the final price that you’re paying, it’s to help yourself to furnish your empty apartment temporarily until you can afford better pieces.
The fact is, the good thing about these payment schemes is that you don’t always have to pay for the furniture in full. Because you only have to pay for it in small increments, you can get one now, and when you have enough money or credit to buy something that you actually like, you can return it and get your security deposit back and buy the furniture that you really want.
While the interest rates are definitely quite high when you consider how much you end up paying for it in total, it is now marketed towards individuals who have the credit or can afford to pay for furniture upfront.
So, basically, expats or families who are just starting out have an affordable way to furnish their homes while still retaining the cash that they have to spend on other more important things.
What Places Offer Rent to Own Furniture?
A lot, actually.
Most furniture shops offer rent to own furniture payment schemes to help ease the burden of having to pay for the items in full. But the majority of the businesses offering furniture for this type of payment plan are dedicated to rentals and leasing.
Most of the time, these businesses target people who are temporarily renting out a flat while they are renovating their homes, or expats who need help setting up their new home.
In Singapore, for example, where more and more expats are being sent to, rental furniture businesses are offering furniture rental packages with attractive furniture pieces at wonderful price points.