While finance is a great option in providing flexible payment terms at competitive rates, there are a few things to consider before making a decision.

Whether it is a credit card or a loan, the customer will pay interest on the balance that they owe for the convenience of having the money upfront and help reduce the credit lender’s risk. When some companies offer 0% finance, this is often a trick to make you think that it is a safer option.

A salesperson will often ask how you are paying before giving you any quote. This is because the ‘finance’ price for a product is usually much higher than the cash price. This is how the ‘0% interest’ claim can be made. If the cost of credit (the interest) is, for example, £1000 over five years, the price has to go up by at least £1000 from the start, without you noticing. Then because you’re already paying the interest (the extra £1000 on the price), they can claim to be offering it on 0% terms. In other words, the interest has been hidden in the purchase price.