Hire purchase or loans

[Bholozy]

Hire purchase is preferable because you are acquiring a property to work and not just for personal use. Higher purchase is easier to repay than loan and you get to use the bus at first installment which you can use to repay the loan. There are also more collateral involve in loan than higher purchase

 

[Kehinde]

Hire purchase (HP) – an option to consider if you're struggling to get a cheaper loan, though the lender owns the car until you fully repay. ... This can mean it's easier to get than normal loans, though you'll usually need to pay a deposit.

 

[.V.]

I think loan is better because then you are guaranteed of as much money as you need to buy the bus. It has some disadvantages though, you may end up losing more than you bargained for if you don't pay back the loan on time.

 

[Godleads1]

The hire purchase method and loans are very good and the same method of acquisition. The high purchase helps you make it easy and the loan means you have cash to make use of.

 

[FreshKaz11]

A friend of mine wants to get a bus for a working purposes but the resources available(money) at the moment is not really sufficient to get the bus, he is thinking of either obtaining loans or going for hire purchase where he will be paying in instalment.
Which is more prefferable?

If he could get who could give him the loan,I will suggest he go for the loan and fill the necessary form while taking the loan to know how is going to pay back ...

It may be an installment payment for the loan,of which is going to use the bus to work and earn the money to pay back.. so I prefer loan ...

 

[Afrinish]

Beyond the initial cancelling period of a loan or a hire purchase agreement, you can only end the contract by paying it off completely, unless your loan or hire purchase agreement says otherwise. Some agreements make you pay the lender’s reasonable administration costs and anything else they will lose because of your early repayment.

 

[Sheyemanu]

I would say hire purchase would always be better option in this case. Writing from experience, hire purchase allows installmental payment which is spread for a couple of months or a over a period of time and I don't think your friend have a good collateral to offer the bank for a loan. And loans are usually very risky especially when things don't go as planned

 

[Jesuyemi 08]

I will prefer a hire purchase because there is room for payment instalmentally even tho there is going to be an interest added to the loan. Getting It at a higher purchase is still better and easy to pay back

 

[Oluwasube]

Going for hire purchases provides him with a flexible payment plan which might make it quite easy for him to pay up as well and take care of his bills. Going for a loan might put so much pressure on him especially if things doesn't work out properly.

 

[Thosynho]

I think instalment payment or higher purchase is better than getting a loan. Moreover, it is more easy to get something on higher purchase than getting a loan to buy it. Example a car. It is more feasible to buy a car in instalment than borrowing loan to buy a car.

You have a point here though. Higher purchase sometimes might be very expressive with interest almost half of the capital or even more. Though loan has it's interest too. I think it's better to weigh up both a d be sure of which to go for

 

[Sheun450]

Hire purchase is a way to finance buying a new or used car. You (usually) pay a deposit and pay off the value of the car in monthly instalments, with the loan secured against the car.

This means you don’t own the vehicle until the last payment is made

 

[Peppul]

For me I don't even like anyone of them, and loan is the worst part of it, but if am still asked to choose I will prefer hire purchase over loan because when you take things in higher purchase there is an agreement that you can pay installmentally for a certain period of time and it's quite different from a loan where by after the due date you are supposed to pay the loan, if you don't pay the loan some certain interest will continue to be added to the initial money that was loan out to you. So hire purchase is preferable than loan and it has a longer periods of payback than loan too.

 

[Philip Omotayo]

High purchase or loan depends on what work for an individual. Is either you go for an high purchase, which is running of a business using someones money with the intention of return on a weekly or monthly basis. It is often common in the transportation business where by someone would buy a car and give it to a person to drive for business and that person buys the car on installment. Also loan, too is good dépending the person.

 

[Ralphjoe]

I will advice him to go for hire purchase over loan because with higher purchase instalmentally payment is assured and he can easily pay the money off because he clearly doesn't have the money for it now.

 

[Akgreat82]

In this case going for Hire purchase is the best option, since he has some funds on hand already, he can use that as a down payment and negotiate for a better deal.

 

[Yasmin]

In hire purchase, the seller/financier owns the asset until the buyer makes the final payment and hence the word “Hire” is used. Whereas in the term loan, the buyer borrows money, pays for the asset, and own it immediately.

 

[Sariana23]

In the case of your friend, if he is a good saver, he can choose the second option and try to save, to pay the initial cost of the bus. This way you will be able to pay the fees owed and in the end you will have your own bus to work with. Applying for the bank loan will be more complex since you will have to pay the principal plus interest, which can make saving difficult.

 

[Folaham]

Wow. You seem to be very enlightened on stuff like this. But what do you think of most Keke drivers. I believe most of them got their Keke with higher purchase. And with proper management, it is paying off for them.

If the keke is bought from a loaned money, we should always understand the technicality of the terms like "either", "or", "and" they look common but they are conditional terms that can make or mare you.
Understanding that the stated interest rate of maybe 11% may look very small but most people didn't understand that they are actually in compound form and defaulting in payment will only make matters worst.

If the keke is lease, understanding who bears the liability and maintenance is very vital. Most financial lease cases don't always end well

 

[Neeta313]

Hire purchase is betterr, that way you can repay the money installmentally, because, loans involve you dropping a collateral and what if the business does not pick up or what if something happens along the way and maybe you can't pay up, they will now keep your collateral and you will also be in debt, to me it's physically and mentally draining.

 

[Olahab]

In hire purchase, the seller/financier owns the asset until the buyer makes the final payment and hence the word “Hire” is used. Whereas in the term loan, the buyer borrows money, pays for the asset, and own it immediately. So, in the case of hire purchase, one cannot sell the asset if he runs into problems making periodic payments but in the term loan, it can be sold.