Balanced Payment Plan
Balanced Payment Plan also known as Variable Rate Hire Purchase with the option of a balloon, offers the benefit of fixed monthly repayments at a variable rate of interest. Unlike a fixed rate finance product a Balanced Payment Plan tracks each change in the Finance House Base Rate, or London Interbank Offered Rate (LIBOR) depending on your agreement. As the rate increases or decreases, so does the total sum of interest that you pay.
At the start of the agreement you simply decide an initial deposit and term of agreement, usually between 12–60 months. Throughout the agreement your balance is then payed in equal monthly instalments.
At the end of the agreement any variation of interest (increase or decrease) is reconciled and will be settled as either a credit, or a charge to your final payment. This could mean you are subject to further payments if the rate goes up over the term or fewer payments if the rate decreases over the term.
Who are Balanced Payment Plans available to?
- Limited Companies / LLP's
- Sole Traders
- High Net Worth Individuals
Why Choose a Balanced Payment Plan?
- Flexible deposit to conserve your personal or business cash
- Fixed monthly payments for ease of budgeting
- Ownership at the end of the agreement
- Monthly repayments do not attract VAT
- Tax allowances for business users
- Potential saving - take advantage of lower or further decreasing interest rates (subject to agreement)
Balanced Payment Plans are not regulated by the Consumer Credit Act, and are subject to status and approval by the finance provider.
For further information or to discuss how Chatsbrook can help you or your business please contact us here.