For the most part, people avoid lease to own financing. This option has received a bad rap, even though it is available to anyone – including those with poor or no credit history. In truth, lease to own financing is actually a great alternative to a traditional loan. Why, you ask? Lease to own contracts are much more budget-friendly than traditional options and offer may benefits for those with short-term needs. This solution is also ideal for those who move frequently and those who have plans to relocate for a short-term period.
Still not convinced? Before you pass up this option, consider how lease to own works and how you can use it to improve your finances.
How the Process Works
Also known as a lease purchase agreement, lease to own involves a contract between the owner or finance company and the borrower. It allows the borrower the chance to purchase the property (e.g. furniture, electronics apartment, etc.) during or after the lease to own term is up. Essentially, you are making “rent” payments; that money then accumulates towards the final purchase price.
The process begins with applying either online or in-person. You then browse the store and choose your favorite brands. Once you have made your selections, you review the lease agreement and sign. After being approved, you receive your new lease to own product. Monthly payments are made from then on, with the option to purchase outright down the road.
What are the Benefits of Lease to Own?
The biggest benefit of lease to own options is the flexibility and freedom it provides. In addition to weekly, bi-weekly or monthly payment options, most programs – including First American Merchant – do not require a stellar credit history to apply.
- Avoid long-term commitment
- Straightforward application process
- Budget-friendly payment options
- No credit or bad credit are still approved
- No upfront payment requirements (other than processing fees)
- Payments are credited towards purchase
Popular Lease to Own Programs
Rent to own apartments – One of the most common lease to own financing options is real estate (apartment, condo, even a house). This provides the individual the opportunity to rent for a designated period of time before given the option to purchase the property. Many individuals and families take advantage of this option when they are unable to commit to a mortgage at that point in time.
Lease to own furniture – Just like leasing an apartment, you can lease to own the property inside your home. Consider the many companies that allow you to easily furnish every room in your house through a short-term lease: Rent-A-Center, Aaron’s and Snap Finance.
Lease to own electronics – By now, you have probably picked up on the ability to lease just about any household item you can think of, including electronics and computers. This is a great option for a new college student with limited funds or those who have a short-term project.
Before applying for any lease to own program, make sure you assess the state of your personal finances. Ask yourself if this budget-friendly option will work well with your lifestyle. It might even provide the opportunity to improve your finances and credit score.Get Started Now