If you need immediate access to an item such as a household appliance—but don’t have the cash or credit available to purchase the item outright—a rent-to-own plan might appear to be a friendly solution. Rent-to-own stores allow you to get the item you need right away without paying the full cost up front. Instead, you can make small payments over time on your way to eventually owning the item. There is no minimum credit score required, and you have the option to return the item if you no longer want to make the payments.
Too good to be true?
So far this sounds like a pretty good deal, and renting an item you need can be a short-term solution. However, the cost of purchasing an item through a rent-to-own plan can be exorbitant. Rent-to-own contracts typically range from 12 – 36 months, and over time those “small” weekly or monthly payments can add up to much more than the retail value of the item. In the end, rent-to-own customers often end up paying two or three times more than the retail price of the item!
A real-life example
An 18 cubic foot stainless-steel refrigerator is currently for sale at Home Depot for $746. The same model is available at a prominent rent-to-own store with a contract of $24.99 per week over a term of 91 weeks. Purchasing the refrigerator through this rent-to-own contract would end up costing a whopping $2,274—over three times the retail price! When expressed as annual percentage rate, the interest rate of this contract is over 160%. (In some cases, the APR of rent-to-own contracts can exceed 400%.)
Explore your alternatives
Rent-to-own stores thrive as a last resort for customers with no other alternatives. If your refrigerator is shot-beyond-repair and you can’t cover the price of a new one with cash or credit, a rent-to-own agreement may be the only way to get the item you need. However, finding an alternative financing solution could save you a substantial amount of money so it is important to explore all of your options.
The VIVA solution:
VIVA was founded to provide affordable financing for individuals who have limited financial options due to their income or credit history. VIVA’s installment loans can be used to cover the cost of large purchases like household necessities at rates similar to a typical credit card—instead of being dragged through an expensive rent-to-own agreement.
Eligibility with VIVA is based on employment and there is no collateral or minimum credit score required. If you are in need of affordable financing, you can apply for free at www.viva-finance.com to see if there is an option that is right for you. If you have any questions, please give us a call at (678) 685-8834 and a team member would be happy to speak with you.
Thank you for being part of the VIVA Finance community and we look forward to serving your financial well-being.
Sincerely,
The VIVA Team
All loans subject to the credit underwriting policies of Viva Finance Inc.
VIVA Finance
1447 Peachtree Street NE, Suite 700, Atlanta, GA, 30309
678-685-8834
Building an Inclusive Financial System
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