Ikea 0% loan

madfrenchgirl

Hello MSErs

Sorry if this is in the wrong thread... Mods are welcome to move it if they wish to do so.

Hubby and I are looking into buying a new kitchen from Ikea. However, the soon to come death of our car would mean that our savings would go on finding a suitable replacement. We've been looking into the Ikea 0% finance but we are very inexperienced with this whole 0% finance thing: is it really 0% or is it too good to be true and they usually hide something else somewhere?

Any help/advice is greatly appreciated.

Thank you in advance.

KingElvis

Most 0% deals are just that, you pay no interest IF you pay the loan off within the interest free period. Two problems exist with this sort of deal.

One is that people just don't bother paying up in time and then get a hefty chunk of dosh added onto the loan. People will come up with many reasons for this but it's mostly that people are bored with their purchase by that point and just leave it to add up....companies like this.

The other reason is the goods/services are already over priced to allow for the 0% finance...car dealers are good at this for example.

nomoneytoday

or the company are looking to get rid of old/ obsolete stock, so pay the finance company in lieu of the interest earned

madfrenchgirl

Thx kingElvis, that's really an eye opener for bargaining the price of a new car...

Nomoneytoday, I don't really think Ikea's stock is obsolete yet... :-)

fozmcfc

0% deals are usually fine providing you pay it back before the 0% runs out.

The biggest issue is that people think it is the day that finance is agreed and/or you sign the agreement but it is normally when you apply.

For instance, my mate bought a computer and missed the payment by a few days and ended up having to pay a lot of interest. He made the initial inquiry about buying on 0% finance on the 1st of the month, but because it was agreed and computer delivered on the 8th he thought it was the 8th of the month he had to pay by, but it wasn't it was the 1st.

If you go ahead, make sure it is clear when the 0% runs out, exactly on what day.

Also ask the ways you can pay for it when the 0% is due and also if there are any charges both up front (some companies charge a fee, not a deposit but a fee which adds to the cost for setting up the finance agreement, so it is never completely free interest) and also charges upon payment of the balance. Some people report that some companies charge 2.5% for credit card payments.

Finally never think or accept if they tell you that the company will inform you in advance when the payment for 0% is due, always make sure you make a note of it and you make the payment at least a week, preferably 2 weeks in advance, that way you can query things if things don't go to plan, before they start thinking of charging interest.

As I say, just exercise caution and common sense and you should be fine.