A girl named Alison, who lives in Ontario, Canada, bought a laptop worth $700 (15.8 million) in 2014 with the “buy first, pay later” method. Over the past 7 years, she has paid a total of more than $2000 (45.3 million) still unfinished. Currently, she is still carrying a debt of nearly $ 400 (9 million) from this loan.
Specifically in 2014 Allison was going to school and needed a laptop. The salesperson told her that if she couldn’t pay the full amount for the computer, she could choose “buy first, pay later”. This way, Allison can pick up the goods without paying immediately.
Allison was interviewed by CTV News about her prepaid postpaid buying experience.
The “buy first, pay later” proposal sounded like a good idea and allowed Allison to buy the computer immediately before there was enough money to pay. Allison also defers her payments by one to two years because there are financing options supported in the form of promotions, interest rate extensions and revolving credit packages.
But this led to consequences because of the long stretch of the debt, Allison had to pay a lot of interest. Alison said: “I couldn’t pay the full cost of the computer at the time, and I knew that there were financing options like buy now and pay later. At that time I thought this way of buying was great.
I bought this laptop 7 years ago for $700 (15.8 million). I paid $23 (521k) a month for 90 months, for a total of $2,070 (46.8 million).” Now, I am further shocked to discover that in 2021, seven years later, I still owe $397 (8.9 million) in computer payments because I didn’t realize I signed up for a revolving loan and mostly paid interest in the past“.
Alison couldn’t believe this was happening. She had to pay for the computer with the price of four similar computers combined.
CTV News contacted the finance company for this computer loan from Alison. A company spokesperson said:Customers use this revolving credit because they want to take advantage of our deferred interest rate promotion. Most people pay off the balance before the time expires, to avoid paying interest. But Alison didn’t do that.”
CTV News financial commentator Pattie Lovett-Reid says people have to be careful when applying for some prepaid loans, because if they miss the allotted deadlines for repayment, they’ll fall. in the situation of debt piled up, interest piled up continuously.
There are different types of prepayment, including 12 to 24 months with no interest, but if you don’t pay in full by this specified term, you may have to pay up to 30% interest for the entire term. get a loan.
Lovett-Reid said: “Usually these loans will not require a prepayment. The amount owed also does not have to be paid off within 1 year. So before agreeing to any prepaid plan, make sure you fully understand the terms and conditions.”
The protagonist of this story, Alison wants to share her story to warn others. If you’re also considering buying first, pay later, be sure to note the due date so you can pay on time. Also, always try to pay more than the minimum monthly payment, or the item you buy could cost up to three times the original sale price.