Rent-To-Own

Rent-A-Center

What Is This Type Of Credit?

It is when you are leasing out a home, car, furniture, etc. to someone. They are making monthly payments according to their interest rates & fees.


Interest rates & fees are calculated by subtracting the fee from the rent to own price. Multiply the interest by the loan. Divide the annual interest rate by 12.

When Might A Consumer Seek This Type Of Credit? & What Are Other Sources Of This Credit?

A consumer may look for this type of credit when they are in need of a vehicle, home, etc.


Aaron's is another source of this credit other than Rent-A-Center.

Average APR: 15-20%

sources: www.consumer.ftc.gov www.banking.about.com

What Are The Advantages & Disadvantages?

Advantages:

-You can buy things with bad credit.

-This is a way to earn income on property.

Disadvantages:

-If you do not "buy" the home, ect., you lose all of the extra money you put into it.

-There has been several rent-to-own scams.

What Are Three Alternatives Consumers Should Consider Before Using This Credit?

Find out whether you qualify for store financing.

Consider layaway- putting money down & paying overtime.

Think about whether you have room on you credit card.