HP or other credit? Is one easier to get than the other?

baddog99

Hi there.I understand that HP means that you don't actually own the goods until the debt is paid. For this reason, am I correct in thinking that HP should be easier to get than other forms of credit, as the loan is secured against the goods?Thanks

Rafter

Generally yes - it is easier to get say a car loan on HP rather than an unsecured loan that you plan to use to buy a car. Reason being the loan company can always take back the car and sell it if you don't keep up repayments, whereas with an unsecured loan they have to join the queue with your other creditors.

The HP company still have to check that the repayments are affordable and will be cautious if you have a particularly bad credit history though. Offsetting that, the larger the deposit you can make, the better as the value of the car will probably always be higher than the loan outstanding, giving the loan company plenty of security.

R.

alistair1234

You will tend to pay higher interest rates also as a priveledge for being able to get the finance cheaper.

Recently HP rates have been cheaper because dealers are struggling to sell cars, you can get some good deals at say 5% if you can pay 50% deposit. So go get a personal for half of the amount and put the other half on HP for free.