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If you need to make a large purchase but don't have the funds to do so, there are a number of options to choose from. Both short term loans and rent to buy arrangements will give you access to the item up-front then let you pay it off over a set term.
Compare the two below to see which one may be right for you.
Short term loan
Also known as a payday loan, this is a type of personal loan that generally lets you borrow up to $2,000. You will need to repay the loan within a period of up to two years, but may be able to pay it off in full as soon as you wish.
Rent to buy
A rent to buy option lets you lease an item (such as a TV) over an agreed term, which you will then need to purchase at the end of the rental period. You get immediate access to the item but need to make regular rental payments, as well as a final payment to take ownership of the item.
You will pay less for the item up-front, but will generally pay more over the course of the rental period than if you were to buy the item outright.
Short term loan
Rent to buy
Short term loan
Rent to buy
A short term loan may be a better option if you need to borrow a specific amount of money to fund a purchase or if you are confident you will be able to repay the loan quickly. Payday loans have high interest rates and fees, and can become very expensive if you take a long time to repay the loan. You will generally also pay an application or establishment fee, which may rival the cost of the item itself.
A rent to buy option may be suitable if you want the stability of regular repayments and do not believe you will have the funds to cover the full purchase in the near future. However, you may end up paying over double the purchase price of the item, and will generally need to make a final lump sum payment at the end of the rental term.
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