The hire purchase or installment sale is a kind of credit allowed to consumers. Like in the charge account credit is not in the form of cash; it is in kind.
This kind of consumer finance is also immensely prevailing everywhere. It is most used by salaried or those people who belong to low or middle income groups.
This method of finance prompts consumer to hire-purchase TV, furniture, cars, VCR , Refrigerators, and other home appliances. To avail this opportunity the buyer has to pay on the spot around 10 to 25 percent of the total price. This payment is known as Down Payment. The balance is payable in six, twelve, or eighteen months equal installments. The installments include interest.The greater the period the higher amount of interest is charged.
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