Finance Balance Payments
Finance Option - Balance Payments
Balance Payments
Balanced payment follows a similar format to hire purchase, but offers greater flexibility than a fixed rate agreement. This contract is available for balances in excess of ?25k and can be profiled both with and without a balloon payment at the end of the term.
Balanced Payments differs from standard fixed rate agreements because of the way the interest is applied. In this instance, the charges are spread evenly across the contract by way of daily interest. This gives the customer the option to make additional lump sum payments into the agreement and at the same time is less punitive when settling the agreement early.
Interest linked to Finance House Base Rate whilst payments remain fixed throughout the term. On completion of the agreement the Finance House calculate the difference in charges as a result of any interest rate variations.
Monthly payments do not attract VAT and interest on your payments is still allowable. Additionally, a proportion of the car's value can be written down against taxable profits.
Benefits of Balanced Payments:
- Low initial payment possible
- Available with or without balloon payment
- Flexibility
- Reduced termination costs
- No VAT on the payments
