TIPS FOR BUYING FURNITURE
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Christmas preparations often include buying new furniture. For those of you who are planning to buy furniture this Christmas, the Consumer Affairs Commission wants you to ask yourself the following questions before you even visit the store: Do I really need it? How will I use it? What size can I accommodate? And, how much can I AFFORD to spend?
When you have answered these questions, the next step is to shop around for the best price. Make sure you review the labels on furniture items, which should state - THE COUNTRY OF ORIGIN, TYPE OF MATERIAL (S) USED AND HOW TO CARE FOR IT. Where plastic chairs are concerned labels should also tell you the maximum weight that can be accommodated.
Do not forget about Durability. Ask store representatives about the items’ strength, check and see if it wobbles, look at the material used to see if they are properly connected. For furniture made of wood check to see if there are any cracks and/or bubbles in the finish. Metal furnishing should be solid and have a plastic type (lacquer) finishing, while iron pieces should be coated with an anti-rust finish and have plastic foot guards.
If you are one of the many persons that will have to pay for the item(s) overtime, then please consider the following comparison. For ease of assessment we will assume that you are buying a leather sofa valued at Ja $60,000.
| |
Hire Purchase |
Credit Union Loan |
|---|---|---|
| Deposit Required | 1st Instalment |
$10,000 |
| Repayment Time | 36 months | 36 months |
| Monthly Instalments | $2,716 | $2,659 |
| Interest Rates | 67% | 26% |
| Other Charges | Service charge of 1.6% per month | Processing fee 1% of the amount being borrowed & Commitment fee of 2 % of the amount being borrowed |
| Total Amount Repaid | $115,138 | $95,730 |
| Collateral Requirement | None | Yes (Cash, Life Insurance, Stock, Bond, Property, etc)
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| Insurance for sofa | Yes | No |
| Other Requirements | ID, Proof of Employment, Proof of Residence, References | ID, Proof of Employment, References, Pro Forma invoice |
As the Credit Union Rate is charged on the current balance, the quicker you repay the loan is the less interest you will pay and the less you will repay overall. Financing from retailers is calculated over a period, hence repaying early has little advantage. Remember that financing through either of these institutions requires long-term commitment and you should therefore have a steady income throughout the life of the loan. Given all these, CAN YOU REALLY AFFORD NEW FUNITURE?
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