Balanced Payment Plans offer a fixed monthly rate, in the same way that HP or PCP do, but the difference with this option, is that, unlike the other plans that have a fixed interest rate, this has a variable rate which tracks changes in the lenders rate.
This means that during the lifetime of the agreement, the rate will go up or down which in turn means the interest you pay will also fluctuate in line with this.
Once the initial deposit Is paid, the remaining balance is then paid over the term of the agreement which can be from 1 to 5 years. At the end of this plan, the interest is calculated to take into account any fluctuation during the term of the agreement and there will either be a remaining amount to be paid, or a refund due depending on how the interest has been affected.
Another way to reduce the monthly payments, is a pre agreed Balloon Payment at the end of the agreement, but things you may want to consider with a Balanced Payment is:-
Whilst the Balanced Payment Plans can give you access to some of the additional features of variable rate finance, this type of agreement is not regulated by the Consumer Credit Act.
Remember how the cost may go up if the interest rates increase, meaning you will pay more (they may also go down which can result in money back for you)
With this type of finance, the vehicle cannot be returned to the lender, so you need to be sure the various pro’s and con’s for a Balanced Payment Plan are carefully thought through.
HERE’S WHY YOU CAN HAVE CONFIDENCE IN LEODIS FINANCIAL
We are an independent reputable finance broker based in the UK and we are approved by SAF. Our team is hand selected so we can therefore ensure they work to the same exacting standards and will work hard to meet your needs for the purchasing of your vehicle. We always put our customers at the heart of our business.
