This essay will look at why financing computers and technology has risen tenfold in recent years, and why it may be a realistic choice for the right person.
What Does the Term “Laptops” Mean in Finance?
When you finance an item, you choose to pay for it over time rather than paying the entire amount up front. Credit companies have emerged that will lend you money to make a significant purchase, and then you will reimburse them each week or month, according to a payment schedule provided in the credit agreement.
It’s comparable to a mortgage or a car loan, but on a much smaller scale. Credit companies often charge an APR (Annual Percentage Rate), which means you’ll pay somewhat more for the product than if you bought it outright, with the difference going to the credit company as payment for giving you with the financing option.
Consider the reasons why people finance anything. It’s really simple; many of us don’t have the money to spend on needed but expensive things all at once, so when the option is available, it’s far more financially wise to pay over months and years to decrease the impact while still obtaining access to a vital resource.
At first glance, it may appear absurd to regard a laptop as a critical resource, but when you think about it, we’d be pretty lost without fast access to a laptop or computer. We rely on laptop computers far more than we realise, for anything from online banking to signing important documents to obtaining non-emergency medical advice.
As the cost of luxury items and technology has risen, so has the use of financing solutions. The technology in our telephones, for example, is astonishing; the new Apple iPhone 12 even integrates NASA technology. However, this comes at a considerable price, and Apple and other retailers are well aware that only a limited percentage of buyers will be able to afford to purchase these phones outright.
As a result, in order to ensure that everyone can afford this marvel of contemporary technology, they make a simple monthly payment available to the user, usually over a two-year period. This allows people to buy and own expensive goods, whether they are truly necessary or not.
Several studies have also looked into how and what different generations spend their money on. According to the Modern Wealth Index 2017 poll, Millennials and Generation Z spend significantly more of their money on luxuries and do not save for the future, with the vast majority having less than £1,000 in savings and many having none at all.
With these financial figures, it’s no wonder that many of these generations must rely on the capacity to finance products, or they will be unable to obtain the desired comfort items at all.
What is the Financial Process?
Financing an item is a simple process. Retailers will work with companies that specialise in lending money to consumers for the purchase of goods and guaranteeing repayment.
Consider Curry’s: they serve as a retailer, but they do not lend money to customers. Instead, they work with a credit firm to whom the customer will be referred. This is now done in an instant, whether online or in-store, and a decision is made promptly.
Here’s a step-by-step breakdown of how it works
You choose a product, such as a laptop or a vacuum cleaner, that they wish to finance.
You can either alert a store assistant in-store or proceed with the checkout process as if you were purchasing the item totally online.
When shopping online, start by selecting the financing option from the payment methods.
The creditor will then ask for some basic information about you, such as your name, address, employment, and income. They will also do a credit check, granting them access to your credit data. They will use all of this information to decide whether or not to lend you money.
If your application is accepted, you will be advised of the credit agreement terms, payment schedule, and interest rate, which you can accept or decline.
If you accept the terms, the product will be supplied or delivered as usual, and the credit company will pay the retailer, leaving just your agreement with the credit company.
How much would I have to repay?
The amount of interest that is applied to a commodity varies substantially from one to the next. A bed or sofa, for example, is generally supplied at 0% APR because financing is common on these items, and businesses are well-versed in arranging financing.
Other electronic devices, such as telephones and laptop computers, have higher APR rates of around 29 percent, however this varies from company to company and consumer to consumer. They will also have regular deals that provide 0% financing for specific months or maybe the entire term.
The interest rate may also vary depending on your credit score and report. If you have a low credit score, credit companies will view you as a much bigger risk and may raise the interest rate paid to you to compensate for the increased financial risk.
Who Is a Laptop Financing Provider?
As previously stated, shops have no financial risks when financing things to customers because a third-party credit organisation pays them on the customer’s behalf once a credit arrangement is established.
As a result, the majority of laptop sellers are now able to offer financing as an option, especially as newer, more expensive machines are frequently developed.
Gaming laptops, for example, are powered by ultra-high-quality processors, and the amazing visuals are created by high-powered graphics cards, making them even more expensive than top-of-the-line laptops.
Because gaming laptops can cost up to £5,000, financing is essential if you want to sell them to anyone. You may have seen that new companies such as ClearPay and Klarna have integrated directly into merchant websites, making financing products readily available.
Is it Possible to Get Laptop Financing?
Your ability to receive laptop financing is mostly impacted by your credit score and report. If you have a history of not repaying credit agreements in full and on time, you may find it difficult to secure new funding.
Similarly, if you currently have a number of credit agreements open on other purchases, the credit organisation may view you as too risky and, despite your high credit score, will not extend you additional credit.
Some companies specialise in providing credit to people who have a bad credit background. The problem with credit ratings is that they are tough to recover once they have deteriorated.
Assume you missed many payments on a credit arrangement five years ago, resulting in a default that you later paid off in full.
Even if you have paid off the loan, the negative impact on your credit score will remain. In this case, the only way to improve your credit score is to obtain credit and demonstrate your capacity to follow through on a credit deal.
You should anticipate to pay higher interest rates with those negative credit specialised organisations, and you may be required to go through a separate application process that includes more information about your income and expenses.
What Are the Benefits of Buying a Laptop on Finance?
We’ve now investigated the process of financing a laptop purchase, but is it the best option for you? Should you save up for a laptop or other high-priced goods instead of enrolling into a credit agreement?
Isn’t it preferable not to require credit and financing in order to have a spotless credit file? Let’s take a look at the benefits of buying a laptop on credit.
Convenience
To begin with, it is self-evident that financing a laptop is far more convenient than investing a large sum of money all at once.
A good laptop will cost at least £400 and possibly several hundred pounds more, making it an expensive purchase.
As previously said, many people have less than £1,000 in savings, so you could technically spend a big percentage of your savings to avoid financing a product, but you would lose the safety net of having savings available in case of an emergency.
Purchase a Laptop Immediately
We’ve all been in situations where something abruptly breaks, leaving us with little choice but to pay to have it repaired or replaced.
However, the expense of purchasing a laptop on such short notice is sometimes prohibitively high. By financing the laptop, you may almost immediately pick it up from a number of retailers and be back online before any problems emerge!
Take advantage of 0% APR offers
With a 0% APR, you won’t spend a penny more than the cost of the laptop, so you won’t lose anything by paying for your laptop on loan and avoiding any costly one-time expenses.
Growth of Credit
As previously said, the only method to demonstrate financial competence and so raise your credit score is to obtain credit and handle it effectively. If you avoid taking credit, you will not be able to enhance your score or turn a good score into an excellent score.
Obtaining credit and then returning it in whole and on time grows your credit file and report, demonstrating your ability to manage credit accounts.
What Are the Cons of Buying a Laptop on Finance?
As with most things, there are perks and disadvantages. Here’s how we’ll categorise them:
Some retailers offer exorbitantly high financing rates
Customers who want to pay for items on credit, particularly those with a low credit score, may face high interest charges from some businesses.
This means you will pay far more than the suggested retail price for your laptop when you may not have needed to. You may avoid this by shopping around for the best interest rates or seeking the assistance of a bad credit expert if you find yourself in that situation.
Payments that are late have a negative influence on your credit score
Following a payment plan to the letter will improve your credit score, but failing to do so will lower it. Failure to make payments on your laptop may result in not just a poorer credit score, but also more significant consequences such as bailiff visits, legal threats, and court summons.
Conclusion
In today’s world, laptops are extremely required, yet the cost of a high-quality computer is still prohibitively expensive to acquire altogether.
Shops and credit providers have established a system that allows clients to receive financing for a wide range of things at the drop of a hat, allowing them to afford these high-priced items.
While we’d all like not to have extra monthly expenses, it’s far better to manage your money in smaller chunks over a longer period of time than to scramble for hundreds of pounds every time you need a new laptop or sofa.
Buying a laptop on credit can be a great way to improve your credit score, get a great computer, and keep your finances under control if done correctly and in accordance with the terms of the agreement.
FAQs
Is it possible to get a laptop on credit if I have bad credit?
You can acquire a laptop loan even if you have bad credit. You may have less alternatives in terms of which companies and merchants would accept you, and you may finish up paying more for the laptop when interest is added in, but there are solutions to consider.
Can I get an Apple laptop even though I have a low credit score?
Apple computers, known as MacBooks, are available on finance and work in the same way as any other laptop. You can try to get them through Apple’s website using their credit provider, Barclays, but you can also get them through other retailers like Curry’s and Argos, both of which accept finance as a payment option.
Do you provide financing for used laptops?
Refurbished laptops are reduced-priced versions of laptops supplied by specific stores and manufacturers. They can now theoretically be utilised because they have been opened by someone else, although they are rarely used. Each returned laptop will be thoroughly refurbished by the manufacturer before being resold.
Reconditioned laptops are a great way to save money on a certain item, and Apple is well-known for its reconditioned products. Like any other laptop, these refurbished models are available on credit.
Is there a deposit necessary at the beginning of the agreement?
When purchasing a laptop, you are not needed to submit a deposit; however, some lenders will want the first month’s payment in advance. The cost of the credit agreement will be decreased if you make a deposit. For example, if a laptop costs £600 and you put down £300, the lender will only give you £300 and you will only be charged interest on that £300.
What is a CCJ?
A county court judgement, often known as a CCJ, is a court order requiring you to reimburse a debtor if you have not already done so. These are significant blemishes on your credit report that last six years from the day they were added. This process usually takes a long time because it is the last option for corporations to recover their money.