What Is Store Finance?
Many high street stores will allow you to ‘buy’ a product while paying nothing for a set period. You can then pay for your goods in instalments from that point forward. Interest will be added, usually 20-30%, although it is reasonably standard to have an interest free grace period. If you pay everything back within this time, you’ll be interest-free. Afterwards, your debt will grow incrementally.
If you cannot afford to pay back everything that you owe during the grace period, it is best not to take on the arrangement as it can very quickly get out of hand. You should also consider that circumstances change, and you might be in a position when it comes to footing the bill that you don’t have the money. It’s generally better to just buy what you can afford, rather than relying on finance agreements like this.
The Consumer Credit Act has assured that unlike deals such as hire purchase, most store finance agreements are considered ‘unsecured’. This means that if you cannot meet your repayments the lender cannot repossess the item.
What if I Cannot Make My Store Finance Repayments?
In the event you cannot make your repayments, the lender can only go through the usual channels for recouping losses from an unsecured loan. As mentioned, they can’t take the item back from you.
They will start by sending letters informing you that you are in arrears. The letter will ask you to pay back what you owe. If you don’t, then your debt will default. The lender might try and take court action against you, or they may pass the account on to a debt collection agency which can use very intrusive methods to try and get the money back.
What Should I Do If I Am in Store Finance Arrears?
If your debt has remained unpaid well into the period where interest applies, it is incredibly important that you seek professional help straight away. Court cases can bring unnecessary stress to you, your partner, and your family. We can put an end to creditor harassment and offer a deal which allows you to pay back an affordable amount of money in a single payment every month.
For more information call 0800 808 5124.