Hp Plus

Hire purchase (HP) with a Take a Break option

This HP product is a variation on HP Fixed that combines the best features of both fixed and variable rates and offers the ability to take payment holidays with the Take a Break option, terms apply.

HP Plus has fixed repayments of capital and estimated interest. This is particularly appropriate if early settlement is expected or there is the possibility of lump sums being paid off during the agreement term. Both are possible and would generate extra savings because the interest is calculated daily on the remaining balance. Any lump sums paid during the agreement would consequently shorten the repayment period and any missed or partial payments would consequently lengthen the payment period, in essence ‘fix the payment, float the period’. The actual interest rate is based upon a percentage rate negotiated at the start of the agreement.

Take a Break – A feature unique to HP Plus that gives you the option of taking an unplanned payment holiday by giving us as little as 15 days’ notice of the months for which you would like to ‘Take a Break’ from your payments.

You can do this once in each year for a total of six months’ payment holidays during a three, four or five year agreement. If you take a payment holiday, we will simply extend the period of the agreement, calculating the cost of the holiday using the original interest rate. There is no fee charged. The payment amounts will not change, but the period will be lengthened as appropriate, and the final payment may need to be adjusted up or down slightly to balance the account. The goods become yours when all payments have been made.

Note: HP Plus is not available on regulated credit agreements (i.e. if you are not a limited or public company, limited liability partnership, a partnership with four or more partners, or are borrowing £25,000 or less.)

Benefits of HP Plus:

• The goods are yours after the final payment
• The Take a Break feature is standard on eligible agreements
• Interest is calculated daily, which is beneficial if lump sum or early settlement payments are likely
• Interest rate is agreed and fixed at the time of documentation
• Fixed repayments of capital and interest
• Accurate budgeting
• VAT is usually fully reclaimable
• Hedges against inflation and interest rate rises
• Interest charges are usually tax allowable
• Tax writing-down allowances may be available, including the Annual Investment Allowance and super-deduction

What happens at the end:

•  You pay a nominal option-to-purchase fee at the end of the agreement, and ownership transfers to you.

How it compares: