Retail Sales Financing

We all strive for maximum satisfaction of our needs and surround ourselves with the best and most practical things. This applies to both repairs and purchases of household appliances, accessories and clothing. But not everyone can afford to buy their wardrobe or a new phone for cash. That’s what retail sales financing was invented for. It is designed to make our lives easier and give us the opportunity to buy a little more than we can afford right now.

What is retail sales financing?

Retail sales financing is targeted financing of the bank for the purchase of a particular product at the expense of borrowed funds at a certain interest rate and for a specified period. That is, the bank pays for your purchase in full, and you return the money taking into account the interest rate set at the time of signing the loan agreement.

Often, large chain stores of equipment, car sales or jewelry try to increase their turnover by cooperating with banks (partnership financing). They invite their representatives to provide instant loans. Accordingly, when you come to the store for a purchase, you can contact a bank employee and get a loan for a specific product right on the spot.

Advantages of retail sales finance

  1. You can get a loan in the shortest possible time and solve your financial issues as quickly as possible;
  2. The procedure for getting a loan is simple and does not take much time (as a rule, it is 10-30 minutes). By the way, such a service is very convenient — you get the opportunity to solve financial issues by receiving cash directly on the spot;
  3. The terms of the loan are quite loyal. No guarantor, collateral and insurance contracts are required. Only the most necessary documents are needed. Most often, you need an ID and proof of income;
  4. The convenience of payment is an important point. You can make payments each month. In addition, you can repay your loan early. The sooner you decrease the amount you owe, the less interest you pay.

Disadvantages of retail sales finance

  1. Interest on the loan significantly increases the cost of the product;
  2. The most significant psychological disadvantage of buying on credit is the expiration of the period of initial pleasure from the purchase, while the loan payments must be paid for many more months;
  3. There is a high risk of paying a credit institution a much larger amount for using the loan than it seems at first glance — often banks mask the real interest rate.