It’s nice to want something, go to a commercial house and have it the same day, right? No prepayment (premium), without having to save for months to get it … but do you really know how much you pay for that credit?
Most always when shoppers visit appliance stores, they pay attention only to how much they have to pay monthly or biweekly and get carried away by the quota that best suits their capabilities (the smallest), regardless of the term and amount they will pay for that credit
It consulted most of the appliance stores that sell them on credit and found that the general interest rate they claim to have is from 4% to 6% per month (48-72% per year). Contrary to what many may believe, it is a higher rate than the most expensive credit cards (up to 50% annual interest in dollars).
Longer term, more expensive
Logically if the credit is for a longer time, you must pay more in interest and add additional charges.
How much more? I give you an idea: I quoted a TV that was sold in cash at 10,000 cords (9,999 say in the store). If you do not give a premium and it is funded for 12 months you will end up paying 17,232 dollars. If it is financed at 18 months you will pay $ 20,448; if you chose a 24-month term, it would be 23,952 dollars and 48 months dollars. At 48 months (4 years) you would have paid the equivalent of four televisions. All these fees are those provided by the store and you can see it is actually more than 70% per year and that is because other charges and commissions are added to the interest rate (that is, the TCEA).
Yes, it is quite expensive credit, but remember that there you are not only paying for the product, but also for the people who work in that store, the energy consumed by all those sample devices that are connected all day, the air conditioning, parking, etc., etc.
What is more convenient?
Save to buy that good. Remember that the credit should only be used to buy things that we can NOT buy cash because its price is too high. Many people will say that you must spend a lot of time to save and buy, but it is not necessarily so. The monthly fee for the TV credit prior to one year was 1,436 Cordoba per month. If you were willing to save that same amount, you would not have to wait a year: after seven months you would have the required amount.
What if I pay before?
In all the stores consulted they said that if you want to make early cancellation, you can make advance payments on the main balance, therefore the basis on which interest is calculated falls, and eventually you end up paying less.
Another option is early cancellation. They review how much is owed to date and the expected interest is eliminated until the end of the contract.
Once you cancel the credit, don’t forget to demand the cancellation receipt. According to article 76 of Law 842 (Law on Protection of the Rights of Consumers and Users) “once the consumer or user cancels the credit granted, the provider will have the obligation to deliver it within a period of up to five business days the cancellation receipt and the other documents in which the respective credit signed by the provider or its representative was formalized ”.
When do I use these types of credits?
I only recommend resorting to buying appliances on credit when the circumstance obliges you. For example, the kitchen in your house broke down, it has no repair … and you have no savings to buy it for cash. In a house you can spend months without a microwave, without sound equipment, without a washing machine and even without a TV, but without the kitchen it is very, very difficult (unless you use less environmentally friendly alternatives). In urgent cases like that you can resort to such loans but try to save enough to make an early cancellation early and thus not pay many interest.
Remember that generally the products offered in these types of shops are merely for consumption, not vital to our lives, so we must rethink whether it is worthwhile to get a hand on credit for it. Can’t you really wait a bit to save the required amount? Think about it.