Rent-to-buy is a concept that involves legal documentation and transaction to lease furniture, device or an appliance such as fridge, mobile or TV for a fixed tenure. It is also referred to as rent-to-own or purchase. During which, one can purchase the rented thing at a particular point of time during the agreement.

How does it differ from the traditional lease?

The rent-to-buy agreement is different from the traditional lease one in many ways. In the latter, the lessee can buy the appliance or device during the agreement, but the traditional agreement doesn’t render such rights. The agreement in the rental purchase can be terminated at any point in time.

History

The origins of the rent-to-own agreement can be traced back to European countries. Later the concept started to be adopted in other regions as well.

Transaction structure

In the rental-purchase agreement, the agreement can be renewed at the end of every week or month if you wish to extend it or the final option is to terminate the agreement. The consumers can choose to make interval payments and continue to use the goods until the fixed tenure.

And, an alternative option is to purchase the product by paying the balance payment and thus, acquiring the ownership of the product.

Why is rent-to-buy preferred?

Rent-to-buy fridge is preferred over the actual purchase of the product because of the ease- of- payment, affordability, no need to obtain a credit score and convenience to obtain expensive products.

Loans have a downside since they can be availed by people with low credit scores, who can’t afford to avail a product apply for rent-to-buy purchase as they get to experience the product and they can slowly make up for the credit score.

Drawback

With a whole lot of features, there are a few drawbacks like high overall cost and late rental payments on the consumer side.

There are many mixed opinions on the rental-purchase concept like whether it should be classified under lease or credit sale.

Goods included

While the practice mostly involves renting goods, appliances, devices; it can be extended to real estate as well.

Process

1. Browse through the website and choose different categories such as rent to buy fridge, rent to buy tv or laptop; or an electronic device
2. The next step is to choose the product model and features you desire(single-door or double door fridge); select the tenure for rental. The rental comes with a refundable deposit which would be returned after the tenure.
3. Finally, make the payment through the preferred payment method. The product would be delivered within the promised period ( few days).

Documentation

Normally, a form needs to be filled along with which your bank statement needs to be submitted.

Conclusion

Rent-to-buy is an easy, convenient and hassle-free offer for people who can’t avail of the luxury of a loan. It’s a preferred way to access the product you desire with minimum formalities and at your earliest. It has several options to suit your convenience and if you like the product you can own it after the payment.