Can anyone help me understand this specific Buy Now Pay Later financing option?

Automaton

I've looked all over the internet for info on this, but the wording on the website I'm using has me worried. I was wondering if anyone could help me with the financing options for scan.co.uk.

The problem is that on the checkout page it words it differently to how it does on their page where they explain their finance options, and the way they explain it on the checkout page makes it seem like there are monthly payments before the 9 month payment-free period is up. Here is what it says on the finance page:

"BUY NOW PAY LATER (9 MONTHS / 39)
After a 10% deposit pay nothing for 9 months"
"This is a Buy Now Pay Later agreement. Customers will initially only have to pay a 10% deposit, with the original loan amount payable in the 9th month, in order to incur no interest charges."

As you can see, from this, it makes it seem like you pay the 10% deposit, then pay nothing at all for up to 9 months, and then as long as you pay all the other 90% off you won't have to pay any more.

However, here is what it says on the checkout page:

"Buy Now Pay Later (9 Months / 39) 19.9%
Pay a deposit of £75.87 (10%) then 39 monthly instalments of £26.36. No interest charges will be incurred if the loan amount is paid within 9 months."

From this, it makes it seem like you pay the 10% deposit, and then straight away have to start off with monthly payments.

Can anyone that's used Scan before confirm whether or not it's a true payment-free period with no monthly payments, and the 39 monthly payments it mentions are only for after the 9 month payment-free period? I have emailed them before to ask about it, and they simply linked me to their finance page and said to call them up if I didn't understand.

Ben8282

I have read https://www.scan.co.uk/info/finance
It is stated very clearly that there is nothing to pay for 9 months.
However, I accept that it is somewhat unclear as it doesn't actually say when the repayments will start. I think it would be reasonable to assume that the repayments will start in the 10th month, but the whole thing is badly written.

bengalknights

Its definitly pay nothing for 9 months after which the agreement begins.

BrassicWoman

the checkout page describes what happens at month 10 if the loan is not settled.

Alderbank

Ben8282 wrote: »

I have read https://www.scan.co.uk/info/finance
It is stated very clearly that there is nothing to pay for 9 months.
However, I accept that it is somewhat unclear as it doesn't actually say when the repayments will start. I think it would be reasonable to assume that the repayments will start in the 10th month, but the whole thing is badly written.

It's not badly written from their point of view. It is written very carefully to deceive.

It is stated very clearly that the original loan amount must be paid in the 9th month, in order to incur no interest charges - in other words the full balance of £533.50 must be paid in the 9th month. On the first day of the 10th month the total payable becomes £894.54 and will continue to rise.

They send no reminders about the date. They know that some users will misunderstand how it works and think payment only starts after 9 months, and many more will forget about repayment until a helpful letter arrives in the 10th month reminding them that £894.54 is now due.

PS it's not new. I remember sofa sellers using this trick 30 years ago

tonyh66

as long as you pay it off in month 9 there will be no interest to pay, monthly payments start month 10 and include interest, just pay it off in M9 and you will have no problems

Brock_and_Roll

Frankly, with interest rates at present levels, I cant see the benefit of even taking up this offer and running the risk that your either forget or otherwise have slightly misunderstood the terms.

Ebe_Scrooge

Brock_and_Roll wrote: »

and running the risk that your either forget.

I agree - the reason these things are set up is that a large proportion of customers will forget, and end up paying a load of interest.


One way around it might be this. Using online banking, set up a "new payee". Then instruct a payment for £533.50 to be taken on the appropriate date in the 9th month.


I'm not sure if all banks do this, but I know Santander ( my bank ) do. Any time I send a payment to an existing payee, it always gives me the option of "Make payment now, or on xxx date".


Just a thought ?

[Deleted User]

i'm not sure why people find these loans so difficult.

I just set up a standing order into a savings account for however many months then make a note to pay the loan off a few weeks before its due.

You can also make partial payments directly with no penalty.

Mobeer

Note this:
"If your application is accepted an arrangement fee of £20 will be applied (charge applies for Buy Now Pay Later option only)"

and this:
"Should you choose to pay the outstanding balance off in full within the deferred period then no interest will be charged, however a £29 settlement fee will be charged."

Automaton

Alderbank wrote: »

It's not badly written from their point of view. It is written very carefully to deceive.

It is stated very clearly that the original loan amount must be paid in the 9th month, in order to incur no interest charges - in other words the full balance of £533.50 must be paid in the 9th month. On the first day of the 10th month the total payable becomes £894.54 and will continue to rise.

They send no reminders about the date. They know that some users will misunderstand how it works and think payment only starts after 9 months, and many more will forget about repayment until a helpful letter arrives in the 10th month reminding them that £894.54 is now due.

PS it's not new. I remember sofa sellers using this trick 30 years ago

Thank you, and thank you everyone that replied.

One final question, again due to the wording: am I able to pay it off in full BEFORE the 9th month? For instance, I'm thinking of paying half of it off in september, and half in January. I don't know why they would word it "in the 9th month" if they mean "before the end of the 9th month".