How much interest will I have to pay on a hire purchase agreement?

• The interest rate will be determined between the parties. Some hire purchase agreements offer no interest repayments. Other agreements offer no interest for a specific timeframe with a set interest rate to apply after a period. A common example of this is a 24-month interest free furniture or whitegoods purchases from large retailers.
• The interest rate is open for negotiation so you should do your research before entering the agreement and secure the lowest possible interest rate.
• Generally the interest rate will be higher or lower depending on the buyer’s credit rating.
• The interest on 24 month interest free arrangements can often be high. You should be careful that you do not sign a contract for an amount that you do not think you can repay within a reasonable timeframe.