Chapter 5: Furniture, Fridges and Other Loans

Another frequently used offer is to promote a no payment plan. This is often used for larger ticket items where it can be of great appeal to many consumers. Obviously, payments will eventually need to be made and over a longer term because of the loan size. Is it an invaluable way to purchase something now and pay later, or just the illusion of getting it today and for free – for a while?

For merchants, it is an attractive advertising campaign used in the fall to defer the payments past Christmas. A 90-day deferral means that the first payment is not due for three months. The interest for this time period is almost always included in the financed amount. Examples of this are detailed in the chapter on vehicle purchases, but are just as relevant for other consumer items.

Retailers do want to make it convenient for consumers to buy stuff. To accomplish this, they have set up arrangements with lenders to enable the sales staff to take credit applications, fax them to the lender and sign the paperwork right at the store. Each company makes their own decision of which lender they wish to work with. There are a number of ways to pay for a purchase and any one of these is fine with the merchant.