In this article, we’ll go over gaming console financing, how it works, where to get it, and everything else you need to know.
What Exactly Are Financial Consoles?
Finance allows you to pay for an item over time through a credit arrangement that protects and informs both parties. For everything from apparel to vehicles, this will typically extend the cost of an item over a period of 3 to 48 months.
Game console financing works similarly to credit card financing in that the retailer will allow a customer to pay them a set amount each month until the product is paid for, plus the interest incurred on the cost over the repayment period, which is typically set at 24.9 percent APR (Annual Percentage Rate) but can technically be set at any amount or completely free at 0%.
In theory, anyone can obtain a game console on credit. Nonetheless, each retailer and lender will have their own rules, which will typically be based on your personal credit score, which basically evaluates how good you are at managing your money and helps lenders decide whether you’re too hazardous to lend to, but some are more flexible than others.
Visit any of the major credit reference agencies, such as Experian and Equifax, to view your credit score and report.
How Do Finance Consoles Function?
Finance for consoles is rather simple and may be performed entirely online. Once you’ve picked on a console, look into whether retailers offer financing for the item. For example, the new PlayStation 5 might be financed through appliance stores like Curry’s and toy stores like Smyths.
Find out how to apply for financing with a merchant once you’ve selected one. You’ll continue through the sale as usual, and when you get to the payment option section of the order, you’ll select financing or something like.
You’ll then provide your personal information as well as some information regarding your ability to finance the console’s monthly instalments.
The retailer will usually utilise a third-party lender for financing, and this lender will evaluate the information you supply together with your credit history to make a swift decision on whether or not to provide you financing on the product.
If you are accepted, you will be given a payment plan that shows how much you pay each month, when the first and last payments are due, and when the first and last payments are due. The total amount will be divided by the period duration indicated to determine these payments.
The Financial Benefits of Consoles
Finance is becoming a far more viable option for large purchases that would otherwise demand a significant cash commitment. In this day and age of surprise releases and exclusive ‘drops,’ it’s tough to know when to start saving for new things, especially sought-after ones like game consoles that sell out in a matter of hours.
Here’s a look at the financial benefits of buying a game console
Cost
One obvious benefit is that you only need to make the initial payment or, in some circumstances, nothing at all to get a new console. The option to pay monthly makes it far easier to manage and sustain than trying to recover financially after spending £400 in a single day. We all assess our revenue vs. salary to see how much money we have left over each month, which makes another £25 expense a lot easier to deal with than losing a large quantity of money in a hurry.
Security
If you buy a games console on credit, you’ll have the store or manufacturer to turn to if you have any issues, something you might not have if you buy a used or second-hand device. This gives you some insurance against potential issues as well as clear proof of purchase.
Transactions in Finance
Several lenders and retailers will run specials on specific products when they are purchased on finance. For example, Klarna is spreading the cost of a brand-new XBOX Series X & S over two years at 0% APR, which means you’ll spend no more than if you bought it outright.
Many lenders, such as Klarna, may provide 0% interest for the first few months of a credit arrangement or, in certain situations, throughout the duration of the agreement.
Flexibility
We all manage our money differently, and we all get paid differently. People are frequently paid on a monthly basis. However, other people are paid monthly or fortnightly, and some self-employed persons may receive smaller amounts of money daily, so having a huge sum of cash available at one time is not always easy.
With financing, you may pay your monthly instalments on any day of the month that works best for you, providing you significantly more freedom than paying for the console up front.
Financial Consoles’ Drawbacks
While there are numerous benefits to financing a game console, there are a few drawbacks to be aware of if they apply to you. These are their names:
Future Credit Consequences
If you are unable to keep up with your payments for your games console and start missing payments, this will have a negative affect on your credit score, making it difficult to obtain alternative financing for various products.
If your missed payments and amounts are not settled, it can result in County Judge Judgements (CCJs), in which a court requires you to pay the amount owing, and if you don’t, you’ll find it difficult to finance anything at all.
Interest
If you buy products on credit on a regular basis, especially if you do so regularly, you will wind up spending significantly more than the RRP. Using these options on occasion will have little impact on your finances, but taking out too many credit products at once may result in big monthly payment amounts and is most certainly a poor use of your money.
Who Sells Financial Consoles?
Finance is available from a wide range of shops, both online and on the high street. It is vital to understand the various ways in which finance can be obtained depending on where you search. To begin, there are stores that specialise in sponsored goods and provide financing immediately.
Whereas the majority of traditional stores that currently provide financing do not truly deliver the financing. For example, you can finance items at the well-known retailer Curry’s by applying on their website; however, the actual credit is provided by a company called Creation Consumer Finance, of which Curry’s works as a broker rather than a lender.
There are various organisations that specialise in providing other stores with the option of providing financing to their customers without taking any risks or completing any of the work themselves. If you fell behind or stopped paying for your purchases, the creditor would pursue the debt, not the business.
Finance is becoming more popular as demand develops, and it won’t be long until you can finance things at a store even if they don’t market it.
Can I Get Financing for a Console if I Have Bad Credit?
When you have bad credit owing to a poor payment history or a low credit score, it can be extremely difficult to receive credit from companies for items such as gaming consoles; but, it is not impossible. Some credit companies specialise in providing credit to those with less-than-perfect credit records and ratings.
They achieve this by boosting the APR in exchange for taking a chance on someone who has previously proved to be a credit risk. While not ideal, getting credit with these organisations may help you improve your credit score if you can keep up with payments.
Although it is crucial to assess if you can afford to pay for a game console on a monthly basis with your present credit condition, you must make that decision for yourself.
If you’re having problems with your credit score or file and need help getting back on track so you can qualify for financing and credit, contact a debt management company for free counselling.
There are government-backed programmes that offer free advice and services to help you get back on track, as well as companies like StepChange that have award-winning programmes that help people get out of debt and back on track with their finances.
When you have bad credit owing to a poor payment history or a low credit score, it can be extremely difficult to receive credit from companies for items such as gaming consoles; but, it is not impossible.
Some credit companies specialise in providing credit to those with less-than-perfect credit records and ratings. They achieve this by boosting the APR in exchange for taking a chance on someone who has previously proved to be a credit risk.
While not ideal, getting credit with these organisations may help you improve your credit score if you can keep up with payments. Although it is crucial to assess if you can afford to pay for a game console on a monthly basis with your present credit condition, you must make that decision for yourself.
If you’re having problems with your credit score or file and need help getting back on track so you can qualify for financing and credit, contact a debt management company for free counselling.
There are government-backed programmes that offer free advice and services to help you get back on track, as well as companies like StepChange that have award-winning programmes that help people get out of debt and back on track with their finances.
Before Buying a Console, Think About Your Finances
It’s a good idea to consider a few things before purchasing a games console on credit to ensure that it’s the right thing to do for your personal scenario.
Financial Situation
Consider your present financial situation; if you’re already stretched thin, any additional monthly expenditure, no matter how modest, won’t be a welcome addition. If you’re worried that your job won’t be as solid as you’d want, or if you’re expecting another child soon, you’ll be pleased you missed another monthly cost.
Depreciation
Consider how rapidly game systems degrade; for example, after only six months, the Nintendo Switch can be purchased for £100 less than its original price. Could you avoid a lengthy credit agreement if you were patient and waited for a lower-priced offer on the console?
Opportunities for Financing
If you’ve chosen to buy a new game console on credit, don’t head to the first store you see; instead, shop around to see if you can obtain a better loan package or a better deal on the system. Many retailers will bundle the system with games to make it a much better buy.
Games consoles are excellent escapism outlets for people of all ages, whether it’s playing online with friends or unwinding after a long week at work with a fantastic adventure game, but these incredible tools don’t come cheap.
Financing has enabled people to obtain stuff they might not otherwise afford, which is a lovely thing to see, but only if that person is financially capable of doing so. Too many people are enticed by the promise of low monthly payments that are barely visible, yet this can lead to serious issues later on.
FAQs
Are there any other ways to finance game consoles?
There are a range of financing choices available, ranging from Buy Now Pay Later, which defers full payment for a certain number of months, to pay monthly plans. See what’s on offer at any electronics or gaming store.
Is it possible to buy a Nintendo Switch on credit?
There are several ways to finance a Nintendo Switch, including PayPal, which recently announced a new financing mechanism directly through their app.
Can new consoles be purchased on credit?
Yes, the new XBOX Series X and S consoles, as well as the PlayStation 5, are now available for pre-order with financing.
Do you also fund video game console games and accessories?
You can finance practically anything that is advertised as having a financing option on a website. Conditions may require you to spend a certain amount before you are qualified for financing, though this varies by retailer.
What happens if I don’t pay?
Failure to repay your loan instalments on schedule can result in major problems later on. This will begin with letters and phone calls, and will be followed by entries on your credit report, bailiff visits, County Court Judgements, and, eventually, the confiscation of property to satisfy the debt.
As a result, it is vital to make your payments on time and to only investigate financing options when you are in the best financial position to do so.