Balanced Payment Plan
A Balanced Payment Plan offers the benefits of a fixed monthly payment, however unlike Hire Purchase, where the interest is fixed, Balanced Payments tracks the changes in the finance house base rate, LIBOR or bank base, depending on the agreement. As rates fall or rise over the period of the contract, so does the interest charge you pay.
How does it work?
You pay an initial deposit and pay the balance in fixed monthly instalments over an agreed term (12-60 months).
At the end of the term any variation of interest is reconciled and will be settled as either a credit to you, or a charge.
Other options available with Balanced Payment Plan include a deferred final ‘balloon’ payment and the ability to make sump sum reductions during the agreement.
The benefits of Balanced Payment Plan
- Flexible – minimum interest penalty options for early settlement
- Low deposit - doesn’t tie up cash reserves
- Adaptable – optional lump sum over payments
- Fixed monthly payment - perfect for budgeting
- Tax benefits - Tax allowances for business users
- Potential savings - save if interest rates fall
- VAT free - no VAT on payments
