A variable rate Hire Purchase (HP) agreement comprises of fixed equal monthly repayments of capital and the interest which is calculated daily against the reducing balance. Popular when interest rates are expected to fall or you expect to settle the entire agreement early or pay off lump sums.

The interest calculated daily, is done so at an agreed percentage over NatWest Base Rate (or another mutually agreeable base rate) and is repayable monthly or quarterly (as per your preference).

It is also possible to settle the entire agreement early and only pay interest up to the date of settlement or pay off lump sums and further reduce the overall interest charges. The machine becomes yours once the payments of capital and interest have been made.

Note. HP Variable is not available on regulated credit agreements (i.e. if you are not a Limited or Public Company, Limited Liability Partnership, a Partnership with 4 or more partners and are borrowing £25,000 or less.)

Benefits:

• Fixed repayments of capital
• Interest payments can be made monthly or quarterly
• Enjoy savings when interest rates fall
• No additional costs for early settlements
• Ability to pay off lump sums
• VAT fully reclaimable
• Tax writing down allowance available including the Annual Investment Allowance
• Interest charges are tax allowable
• The machine is yours after the last payment

How it compares: