Personal Loans

In financial terms, a loan is money you (the borrower) receive from a bank or financial institution with an agreement to pay back the principal amount, plus interest within a specified time. 

Loans are useful for the economy because by lending to new businesses; there is an opportunity for more healthy competition, which in turn increases overall cash flow in the marketplace.

Sometimes, the borrower will pledge some piece of property to the lender to secure the repayment of the loan. This property is the collateral. The interest rates paid on loans are also a primary source of income for the bank or financial institution.

Types Of Loans

There are two types of loans in Nigeria. Secured and Unsecured loans. All other types of loans typically fall under these two categories. Several factors differentiate the different types of loans. These factors also determine the terms and condition of the loans. 

Secured Loans

A secured loan is a loan that has the backing of a collateral, i.e. it is ‘secured’. A typical example is banks requiring loan applicants to present housing documents or proof of ownership of an asset until they repay the loan. The idea is that the lender can sell the asset to repay the loan should the borrower default on payment. Other assets used for collateral are stocks and bonds. Examples of secured loans are Mortgage loans and Term loans.

Mortgage Loans: A mortgage is a type of secured loan in which property or real estate is used as collateral. I.e. The property is ‘mortgaged’ until the borrower pays back the loan. A mortgage loan is also a home loan. You can use it for the purchase of a home.

Term Loan: This is a loan that banks and other financial institutions grant for an amount and repayment terms. The loan typically has a fixed interest rate and which you are to pay over a period. Most loans from financial institutions, especially banks, are term loans.

Unsecured Loans

An unsecured loan, on the other hand, means that nothing is backing up the loan. That is, the borrower doesn’t need to put up any property or asset as collateral. For this category, financial institutions are comprehensive when assessing applicants. They meticulously look through financial records to estimate if the borrower can pay back the loan. Unsecured loans have more risks for the lenders, making the interest rates typically higher than secured loans.

Loans that fall in this category include:

• Personal Loan: This loan is granted to an individual for their personal use. Financial institutions give these loans out depending on the applicant’s credit history and capacity to payback.
• Credit Card Loan: This loan is money a person borrows with their credit card. The card permits them to make purchases when they don’t have cash. The lender provides the cash to make the purchases. However, the borrower is to pay back the loan at an agreed-upon time. 

Other Categories of Loans that you should know about

Asides the two major types of loans, we can also classify loans according to the following categories:

According to the mode of repayment

Single payment loans:

Just as the name implies, this loan allows you to borrow a certain sum of money, and repay at once. However, it also requires you to pay the amount in full at a go, and within a fixed time.

Monthly payment loans:

Monthly payment loans takes the opposite turn compared to single payment loans and allows you repay gradually. Furthermore, it is scheduled in such a way that you repay a fixed amount every month depending on the loan principal and interest. Also, the date in which repayment starts are fixed during the loan process.

Salary advance loans:

This loan tends to short frame financial needs that arise before your paycheck. Also, it works by businesses subscribing to personal loan companies, therefore, giving their staff access to loan as a result. The loan is repaid by deduction from the staff’s next salary. Generally, salary advance loans comes with high interest rates and fees.

According to rates

Fixed rate loans:

Fixed rate means that the loan keeps the same interest rate throughout the span of the loan. Asides this, it could be any of the type loans explained in this article.

Variable rate loans:

This is the opposite of fixed rate loans because it comes with varying interest rates. Also, the interest rates are estimated based on certain changes to the underlying interest rate index. However, the rate has upper and lower limits, which it cannot move beyond within a time frame.

Installment loans:

Installment loans are repaid with a set of scheduled payment. Usually, these loans could span really long (up to 30 years) or as little as a few months. A good example of installment loan is a mortgage. In essence, you borrow and pay up gradually.

Convertible loans:

These loans have a flexible nature and can be changed from one type to another. This means that they could start as a fixed-rate loan, but later switched to variable loan depending on the situation.

Loan Considerations

• Interest Rate and Repayment: It is essential to consider interest rates and repayment periods when choosing loan policies. Typically, the higher the interest rate on loan, the longer it will take to pay off the loan. Interest rates can be on either a simple or compound interest basis. Simple interest means a percentage of the principal amount.
• Compound interest: Compound interest, on the other hand, is the interest paid on interest. The borrower not only pays interest on the principal amount, but he also pays interest earned on both the principal amount and on the accumulated interest. Because interest is also earned on interest, earnings compound over time, like a snowball effect. It is favourable if you are the lender but works against the borrower as the more time it takes to pay back the loan, the more money you have to pay back. Time is money in this case.

Conclusion

Loans can be tricky. While they are an efficient one-time solution, it is easy to get sidetracked and lost in a cycle of repayment and debt. Many people lost homes as a result of their inability to pay back a loan. So before you apply for that loan, ensure that you can pay back at the specified time. It is also generally advisable to apply for loans on a strictly ‘need to’ basis, and not see them as a regular financial solution.

The GTB car loan is a GTB loan that enables corporate entities and salary earners who have accounts with GTBank to pay for their vehicle insurance premium upfront and make repayment over a 12-month period.

What You Get

• Immediate availability of funds to pay for your insurance premium
• An opportunity to pay for your car insurance premium monthly
• An insurance cover that does not require your presence in the insurance office

Features

• As an individual, you can get access to between N20,000 to N1 million while corporate organizations can get between N20,000 to N5 million
• The loan has a maximum tenor of 1 year
• The loan interest rate is 1.67% monthly
• There’s an equity contribution of 20% of your total insurance premium cost
• There’s a 1% one-off flat fee

How To Apply for The GTB Car Loan

You can apply for the GTBank car loan using either the internet banking platform or the GAPS/GAPS Lite.

Using the GAPS/ GAPS Lite:

1. Your loan is availed immediately
2. Your car insurance provider processes your insurance within 48 hours
3. A copy of your insurance certificate is sent to your email address
4. You repay the loan on a monthly baasis

The GTBank Max Advance Loan

The GTBank Max Advance loan is a type of GTB loan designed to provide personal loans to employees of specific private and public organizations who have their salary accounts domiciled with GTBank.

This a kind of loan for different purposes. The major upside to it is that it offers a convenient repayment plan.

Documents Required To Access The GTBank Max Advance Loan

• A completed Max Advance loan application form
• An Employee undertaking to domicile you salary and terminal benefits with GTBank

Interest Rate and Repayment

The Max Advance loan interest rate is within 33.3% of your net monthly salary. The repayment of your principal is equal for every month.

The GTBank Student loan is one of the different types of loan facilities offered by GTBank. It is designed to help you finance payment for school fees. This loan offering by GTBank is one of the top sources for a student loan in Nigeria.

What You Get

• For this GTB loan, you have access to up to N5 million with a maximum tenor of 4 months per request.
• Competitive interest rates plus equal monthly payments
• Immediate access to funds for the school fees

How To Apply For A GTBank Student Loan

• Complete and submit a loan application form
• Submit an employer undertaking form
• Ensure that your staff terminal benefit is domiciled in GTBank. If not, you’ll have to obtain a corporate guarantee

Who Can Benefit From The GTBank Student Loan Facility?

To access this loan you must be a staff of selected companies Government Ministries, Parastatals and establishments, and you salary account must be domiciled with GTBank.

How Is The Student Loan Paid?

Once the loan is approved, it is paid by direct transfer to the school’s bank account or by raising a draft in the school’s name.

Many are choosing the self-employed path in Nigeria today, especially since is one of the best ways to financial freedom. The emergence of freelancers, and the existence of tradespeople, and investors point to the fact that being self-employed is becoming dominant. However, in such a category, getting a Self-employed loan in Nigeria might be inevitable because of the unstable guarantee in your income.

This article gives a general overview of a self-employed loan in Nigeria and brings to you everything you should know.

Who is a self-employed person?

This is an individual who does not hold a job for any specific employer. As a result of this, he or she, therefore, does not get paid on a salary or consistent bases. As a self-employed individual, you trade with businesses directly and earn income from such transactions. Many times, the employer does not withhold taxes, therefore it becomes your responsibility.

As a self-employed individual, it can involve you in different occupations, although highly skilled and major in a particular one.

What are self-employed loans in Nigeria?

Just as the name implies, self-employed loans in Nigeria are loan services available to you as a self-employed individual. The loan scheme and properties vary from one microfinance institution to another.

They design it for self-employed individuals to relieve financial constraints whether in executing a contract or for personal reasons.

Are self-employed individuals the same as Business owners (SMEs)?

Not necessarily. For one, the tax rules that apply to self-employed individuals are not the same as that of a business owner. The owner of a business may hire employees and supersede operations, but technically become an employee and receive a salary. A self-employed person on the other hand is the most times the primary and sole operator of the business.

Where can I obtain a self-employed loan in Nigeria?

Although being self-employed and a business owner differs, the loan service of most financial organizations blurs the line. This is true especially in Nigeria, where self-employed is normally classified with SMEs.

You can obtain a self-employed loan from any financial organization that offers it. This is basically every financial origination in Nigeria. It includes microfinance banks, commercial banks, fintech digital-based companies, individuals, and cooperates investors. 

What are the conditions for obtaining a self-employed loan in Nigeria?

The conditions for obtaining a self-employed loan in Nigeria differ from one financial institution to another. For example, microfinance bank loans are generally easier to access, with lesser paperwork and eligibility criteria too. However, they do not offer as much loan sum as commercial banks who have tedious and lengthy procedures/ requirements.

Individuals and corporate investors are not a reliable way of obtaining a self-employed loan in Nigeria. This is because many would rather invest for a share of equity, rather than offer you a loan like conventional banks.

Fintech digital platforms offer the easiest way to get a self-employed loan in Nigeria, with almost no requirements asides your bank details. However, they offer the lowest sum among all others.

With all that being said and done, getting a self-employed loan in Nigeria includes the following documentation:

1. A functional bank account and bank verification number (BVN).
2. A valid means of identification.
3. Loan request form

And other documents as requested by the institution.

Conclusion

Taking a self-employed loan is a quick way to get out of financial obligations. As a self-employed personnel, you can obtain a loan to fund your business or contracts during a trade. The good thing is that there are more than enough institutions willing to offer one. If you meet the criteria, you can simply apply to get a loan today.  

A loan is one way to get temporary relief from financial burdens. If you have a good plan on ground to repay it, many financial institutions are more than willing to help. One of the largest institutions that offers this is the Central Bank of Nigeria. With a loan and proper strategy, you can finally take your business to the next level with Central Bank Loans.

In this article, we would consider loans that you can get from the Central bank of Nigeria.

About the Central Bank of Nigeria

The house of representatives of Nigeria found the Central Bank of Nigeria in 1958. From then to date it remains the Central Bank and apex monetary body of the country. It is 100% owned by the government. According to CBN’s official release, their functions include:

1. To ensure monetary and price stability.
2. Issue legal tender currency in Nigeria.
3. Maintain external reserves and safeguard the international value of the legal tender currency.
4. Promote a sound financial system in Nigeria.
5. Act as a banker and provide economic and financial advice to the federal government.

Pros and Cons of The Central Bank of Nigeria Loan

Pros

1. Accessible by everyone.
2. It caters to the needs of businesses in different sectors of the economy.
3. Less stringent eligibility criteria.

Cons

1. Loan disbursement time is usually long due to the numerous protocols in place.
2. Loan application involves a lot of documentation and processes.

The maximum and minimum amount of Loan from The Central Bank of Nigeria?

This depends on the type of loan in question. Generally, there are loan options as small as N500,000, and as high as N500 million or more.

Features of The Central Bank of Nigeria Loan

The Central Bank of Nigeria currently offers the following loans:

• AGSMEIS Loan for SMEs and Agricultural businesses without collateral: this loan is available for SMEs and agricultural business owners.  

Features:

1. You can access up to N10 million.
2. Interest rate of 9%.
3. Disbursed by NIRSAL Microfinance bank and other banks.

• Accelerated Agricultural Development Scheme loan (AADS): the objective of this loan is to engage youths in agricultural production.

Features:

1. You must be a Nigerian youth between the ages of 18 to 35.
2. You must sign an undertaking on the terms and agreements from CBN.
3. Up to N1.5 million loan is accessible.
4. Interest rate of 9%.

• Micro, Small, and Medium Enterprises Development Fund MSMEDF Loan: this loan service is strictly for SMEs and micro-enterprises.

Features:

1. Only available to SMEs and micro-enterprises.
2.  Your business must be involved in one of the agriculture value chain, cottage. industries, artisans, services, renewable energy, trade and commerce, and or the businesses allowed by the CBN.

• Anchor Borrowers Program Intervention for Agriculture (ABP): this loan is available to small farm owners engaged in producing specific commodities in the country.

Features:

1. You must belong to between 5 and 20 groups or cooperatives.
2. It is available to businesses that intend to become anchor or farm product suppliers.

• Creative Industry Financing Initiative Loan (CIFI): the CIFI was developed to boost job creation among young individuals in the creative and information technology (IT) industry.

Features:

1. Your business must be in the creative and information technology (IT) industry.
2. Loan of up to N500 million.

• CBN Healthcare Research and Development Grants: CBN developed this loan for the healthcare sector and research and development. It is accessible to institutions, pharmaceuticals, research and development of drugs, vaccines, herbal medicines, etc.

Features:

1. Your business must fall under one of the categories listed above.
2. Up to N500 million in loan.

Note that the loan services listed above have elaborate requirements and application processes. Visit the CBN official website at www.cbn.gov.ng to access the full information.

Are there any additional fees?

No. There are no additional fees to the CBN loan application and disbursement.

How quickly are funds released for a Central Bank of Nigeria loan?

Because of the many processes and protocols in place, CBN loans are not often disbursed quickly. It could take months or up to a year to receive the loan after approval. Because of things, we cannot put a duration on how quickly loan funds are disbursed.

What is the Central Bank of Nigeria Loan repayment terms?

The CBN only repayment terms are the pre-agreed interest rates. These interest rates are usually between 5 to 10% or more, depending on the specific loan in question. During the loan application, however, important details like the rates would be specified. After you exceed the stipulated time for payment, applied interest grows in successions.

Are there any Restrictions?

The only restrictions to Central Bank Loans are the eligibility requirements. If you qualify and have all the documents, then you can apply. Asides that, there are no other restrictions.

Conclusions

The Central Bank loans are one of the ways through which the government of Nigeria aims to improve the economy. The loan offers services to SMEs and individuals across different sectors of the economy, especially those in certain lagging areas.

 If eligible, apply to enjoy the full benefits of the government for growing your business today. 

Opening a pension account is now a statutory requirement for all Nigerian employees. Every month, they make a token contribution to the Retirement Savings Account (RSA) through a Pension Fund Administrator (PFA). 

One unsung benefit of owning an RSA is that you can borrow from your pension funds when in need. Wondering how that can be done? This article would serve as a guide on how to borrow from your pension fund in Nigeria.

Owning a pension account with funds can be a source of help during emergencies. Although there are cons in borrowing this fund, it remains a better option than obtaining a loan from financial institutions.

Conditions for borrowing from your pension fund in Nigeria

To borrow from your pension fund before retirement, you must satisfy one of the three criteria:

1. You must have made additional or voluntary lump sum contributions into your RSA. It is from that money that you can withdraw before retirement.
2. They also allow you to withdraw up to 25% of your retirement account fund if under the age of 50. This holds on to the event of losing your job and you cannot secure another within 4 months. The sum is also tax-free.
3. You intend to get a mortgage loan. RSA allows withdrawal of up to 25% of retirement funds.

Please note that asides these conditions, the Pension Reform Act of 2014 strictly prohibits withdrawal from your pension account.

How to borrow from your pension fund in Nigeria

This depends on your Pension Fund Administrator. Different pension fund administrations have different methods and requirements for releasing funds to you. However, the process requires that you approach your PFA with the following documents:

1. Letter of termination of appointment issued by your former employer or letter of resignation.
2. PFA last three months’ payslip.
3. A letter from you requesting a desired percentage of payment from your RSA balance (25% maximum). This could also be a percentage from your voluntary lump sum contribution.
4. Evidence of accrued pension rights if applicable (mostly for public sector workers).
5. Letter of introduction from your bank or bank statement.
6. Proof of age through a birth certificate or sworn declaration of age
7. Letter from your employer which confirms full remittance of all contributions made to your RSA (for private sector workers).
8. PenCom retiree indemnity form if you work in the public sector.
9. A form your PFA would give, and four passport photographs.

However, if you intend to obtain a mortgage loan, then you must satisfy the following criteria:

• You must be in active employment either as a salary earner or self-employed.
• You must have been contributing consistently to your RSA account for the last 10 years.
• Your debt to income ratio shall not be more than 33.33% of your monthly income at the time of application.
• You must provide all the requested documentation.

The documentation required for a Mortgage loan are:

1. Application letter to access your RSA account
2. A mortgage loan offer letter issued by a licensed Primary Mortgage Bank (PMB) or Deposit Money Bank (DMB).
3. Valid copies of documents to property on which mortgage loan was granted
4. A letter of confirmation issued by the PMB or DMB to your PFA to attest to the authenticity of the mortgage transaction. They must sign this letter by at least two directors of the bank, along with an official stamp or seal.

 

Conclusion

Although with restrictions, RSA allows you to borrow money under certain conditions. Under the right conditions, you can borrow to obtain a property asset or meet other needs. Such money can even be used to fund your business on retirement or invested in something else.

Accessible loans are becoming mainstream in the Nigerian economy. Gone are the days where you must enter the banking offices and institutions for a loan. 

While there are some loans that’ll still force you to see the four walls of a banking office, we can access some in five minutes on your mobile phone. 

Aella Credit is one of the many institutions pioneering access to instant loans. Apart from loans, it’s also an investment platform and a marketplace for health insurance. It’s close to a one-stop-shop for all your business needs.

In this article, we will discuss Aella credit and investment opportunities.

How to access Aella Credit

1. Download the Aella Credit app – it is available on the Apple App Store or the Google Play store. 
2. Create your account. It’s a straightforward form (They won’t ask for your kidneys or anything)
3. Update your profile (Again, no kidney requests)
4. Check your eligibility. This is where you’ll know if they approve you for a loan. This is also where you get to find out how much they have approved you for.
5. Apply for the loan. (Just because you’ve been approved for a certain amount doesn’t mean you have to borrow all of it, especially if you don’t need it. 
6. Only borrow what you need! Remember, loans aren’t free money. You will need to pay back. And even though they aren’t asking for your kidney during the process, don’t put yourself when you must sell to pay back. Just teasing. But seriously though, take only what you need)
7. Receive the funds in your bank account! 

Aella Credit prides itself as being fast with their decision-making process. They claim five minutes is all you need (If you have slow internet, you can’t blame them – but all things equal, five minutes is all you need).

How much can you get and what is their interest rate?

Available loan amounts are between N2000 and N1,000,000 with a maximum tenure of 3 months. Interest rates range between 6% and 20%, and there are no late or rollover fees. 

The hack to qualify for higher loan amounts is to make prompt repayments so you can build your credit score to be available for not just higher loan amounts but more favourable interest rates. 

Aella Notes (Investments)

With Aella’s investments, you can earn a 26% annual return. Pretty impressive considering that the average annual return is about 12% according to the New York Stock Exchange. As if that’s not great enough, investment packages start as little as N10,000! 

To take advantage of this opportunity, simply open an account on https://notes.aellacredit.com/ and follow the prompts. Everything can be done online with the convenience of your mobile phone!

Conclusion

Aella Credit has made it it’s mission to offer affordable financial services in a fast and convenient way. With the facilities available, they have made it pretty easy to use their products to meet any business need. 

Be it, borrowing, or even investing, this platform has made its mark. To learn more about Aella Credit, visit https://aellaapp.com/.

Mkobo was established in 2015 as a microfinance bank and licensed by the Central Bank of Nigeria (CBN). However, they do not operate like traditional banks or microfinance banks, because they have no banking hall, nor do they accept cash.

Just like similar banks like Nirsal microfinance bank, mkobo focuses on providing financial services through secured and unsecured credits to small and medium-sized businesses in the country. They carry out all transactions electronically and it involves no cash.

Why should I use Mkobo?

Mkobo provides one of the fastest micro loans in the country today, for those who do not have access to traditional financial services like banks.

Advantages

1. They require No collateral.
2. Very little paperwork.
3. Quick loan payout within 24 hours.

Also, note that to take a loan, they require guarantors, and your current employment status and details. 

What services are offered by Mkobo?

Mkobo has three different finance packages for you to choose from. They are:

1. Emergency loans

An emergency loan designed specially for you as an employee of certain organizations (both private and public), to give you access to quick short-term loans. 

Getting this loan is quick and simple and takes only about 4 hours between your application and disbursement. You repay the loan from your monthly salary.

Benefits

• Easy application.
• Quick access to money.
• You as an employer is in control of which employee can access the loans.
• Financial literacy – only loans you can afford are granted.

How to apply

• All registered companies have a unique BP NUMBER. Contact your company’s HR for yours.
• Proceed to complete the online application form on their website by following this link (https://mkobo.com.ng/loan/apply/agreement/).
• They will process your application after applying.
• They would deposit requested money in your account within 24 hours.

2. Asset finance

This service targets assets that help you generate income. Mkobo finances such an asset and requires you to use the asset as collateral for the loan.

Also, to access this loan, you must be a member of one organization within their partnership network.

Benefits

• Large loans are available, although still subject to each business partnership agreement.
• No lengthy application process required, it is an instant decision and disbursement.
• The asset you intend to purchase serves as collateral, therefore you do not have to look for another.
• Flexible loan repayment terms (weekly or monthly). The loan term is a maximum of 12 months.

3. Working capital loan

The last loan service offered by Mkobo is the capital loan. It targets experienced agents who work for licensed network managers.

As an agent, you can access up to N500,000 to be used to grow your business. To access this service, you must be an agent for a network manager within Mkobos’ partnership network and have been trading for at least 6 months. 

Benefits

• Instant decision and disbursement mean it does not take time.
• No collateral is needed.
• Flexible weekly or daily payment with a maximum term of 7 days.
• Fair interest rates that decrease over time.

How do I apply for Mkobos’ working capital loan

Simply follow this link to their website to apply: http://mkobo.com.ng/contact.html

Mkobo Festivesave

A digital savings platform which makes regular savings for the festive periods (Eid, Easter, Christmas or New Year) simpler. They carry out the process through the use of automated recurring payment.

Festivesave encourages and helps people cultivate the habit of regular savings. It also rewards its customers with a cash bonus of up to 10% on their savings. 

Festivesave is available on the web and mobile.

Conclusion

Mkobo is one of the best and fastest microfinance institutions to take loans from. They have packages that cater to you as an individual employee, or agent of an organization.

Since all transactions are electronic, you go through minimal stress during the application and get disbursement within 24 hours.

Their services are very easy and quick to use with no collateral. You should patronize them today. 

What if you could eat your cake and have it too? If we are being honest, I have always wondered what that really meant. Like, why would you give me a cake if I can’t have it too? Anyway, before we get sidelined by cake (we can have that conversation another day), let’s focus on Hire Purchase. 

Hire Purchase, I guess will fit the bill of eating your cake and having it too (you already know how I feel about that statement) as you mostly get to use the product you’re paying for. 

What does Hire Purchase mean?

In the actual sense of the definition, it is a system by which one pays for a thing in regular instalments while having the use of it. For example, we can define a hire purchase car as you driving the vehicle while making payments on it until its completely paid off. 

This may sound similar to leasing a vehicle; however, the significant difference is that one doesn’t become an owner when renting a vehicle; it’s only driven for a time and then returned. With hire purchase, you get to own the car after you complete payments.

Common Use

Using hire purchase is common in industries where they use expensive or heavy machinery to run daily operational activities. Examples of such industries could include  construction, manufacturing, engineering and professional services industry.

They can also use it to finance some other capital requirements of a business, for example cars, phones and photocopiers

Benefits of a Hired Purchase Agreement

1. You can spread payments of an asset over a while. Can be as long as 3 – 5 years sometimes
2. You’ll own the asset after paying the last installment. 
3. Immediate use of the asset instead of waiting until you have saved the lump sum of the item.
4. It’s a simple way of financing
5. The interest rate is fixed, so both parties know what is due per time.

Disadvantages of Hired Purchase Agreement 

1. Since hire purchase is usually fixed, if you get into any financial difficulty, you could lose the asset and give up previous payments.
2. There is typically an interest rate attached to the payment, so you’ll be paying more long term versus if you paid outright. 
3. You don’t own the asset until its wholly paid off, which means the owner can seize the asset if you foul on their terms.
4. The duration of the plan can be lengthy. Consider if it’ll still be worth it in the long run.
5. In the purchase of an asset such as a car, if it gets stolen or an accident occurs that results in the total loss of the vehicle, there is typically no protection against that. Even where it’s insured, the full value of the car may not be recovered, which puts you in a shortfall. 

Termination of a Hire Purchase agreement

Termination of a hire purchase agreement can take any of the following forms

1. The terms and conditions as set out in the hire purchase agreement
2. Parties agreeing to a renewal before the expiration of the current agreement
3. When a notice of termination is given by either party
4. The hirer has refused to exercise his option to purchase the goods even after the stipulated time

Conclusion

As discussed, hire purchases have their various advantages and disadvantages. It is a financing method that works well as long as you understand all the risks involved.

It is also good to know that financing assets like this is common, as this agreement typically works well for both parties.

If payments can’t be made because of financial hardship, we recommend that communication must prioritize the owner to avoid seizure of property. You can learn more on leasing also here.