SCAN Finance?

So how exactly does the SCAN finance work? To me it looks pretty complex with a hefty APR on the buy now pay later options.

Basically if I were to get £1k's worth of components from SCAN and get them through their finance option on buy now pay in 9 months time, I would be able to clear the finance before the 9 months was up and avoid the extortionate APR that they show in the example?

(Am pretty psyched that I might be able to get finance on the components themselves as would make building a machine much easier giving me time to save up)

:rules:

Disclaimer: I have NOT looked at Scan's finance options.

Virtually all finance (the kind that Scan offers anyways) works in the same way. Heres the way it works:

1) You want to purchase goods for a set value.
2) You often, but no always, have to put down a deposit for the goods, a percentage normally.
3) You are assessed by a bank/company contracted by Scan to analyse whether you are an acceptable credit risk, IE. do you cross the golden line that means they can lend you the money and they will almost certainly get it back.
4) In Buy Now Pay Later, you put down said deposit, and have a set period of which you do NOT have to pay anything. Herein lies the temptation. In Scan's case, it is 9 months.
5) Now during this 9 months, you have a balance with Scan's bank/company that they have contracted. This will be the sum of the goods minus any deposit you have paid. EG; you purchase £1000 of goods from Scan, and pay 10% deposit. You now owe £900 that is payable over this 9 month period. Regardless of whether you pay it off the day after the deposit, or the very last day of the agreement (9 months later), provided you pay off the entire sum, you DO NOT pay any interest at all.
6) If there is ANY outstanding balance after the 9 months, you are then FIXED, locked, whatever you want to call it, into paying off the remaining balance over a fixed, set period. That is often 24/36 months. This means that even if you have the remaining sum of money ready to pay off the balance you owe, you can't. You HAVE to pay it off over the set period. Even worse, this interest rate is charged against the original balance. So if you have purchased £1000 of goods, and paid off £999 worth of the balance, you are charged the APR against £1000, not the £1.
7) Not paying off the sum during the period allowed, in this case 9 months, does not as far as I'm aware, damage your credit rating. Many people do not pay anything at all and are tempted by the monthly sum that is advertised. EG, PCWorld will advertise: "Take away this laptop for £20 a month today!". Companies advertise in this fashion to appeal to low-income consumers, as if you take out a credit agreement, you are far more likely to roll into the interest period that makes them so much money. What people do not realise is that this figure that is advertised are based on the idea that you do not pay any in the original period and you are fixed into paying for this laptop at a horrendous level of interest, ultimately paying 50%/100% more than if you had just waited a month and outright bought the products. Even better some companies charge whats known as "Early Settlement Charges"; ie. charging you for paying off the balance early within the 9 months.

Thanks alot for that Ph4ZeD so works just how I thought.

Do you know if SCAN finance charge an early settlement fee or not? As obviously this would make the finance a lot less appealing.

When I ran my finance deal through at the start of the year, all that's charged is £25 setup fee and then 1.6% payment processing fee (even on a cheque...)

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Originally Posted by Sacred

Thanks alot for that Ph4ZeD so works just how I thought.

Do you know if SCAN finance charge an early settlement fee or not? As obviously this would make the finance a lot less appealing.

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It will state this in the Terms and Conditions, so just take a look.

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Originally Posted by Ph4ZeD

It will state this in the Terms and Conditions, so just take a look.

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:embarrassed:

Anyone have a link to them? As I can't seem to get the link on the home page to work again, and have searched their website and can't find anything on finance anymore :help:

http://www.scan.co.uk/finance/

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Originally Posted by DavidM

http://www.scan.co.uk/finance/

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That really should have been something I tried :stupid:

The finance looks alright, so think I'll be getting myself some new components from SCAN and trying to build my first computer as soon as I get my student loan to cover the 10% deposit fee :mrgreen: am well excited!

Thanks for the help guys!

You talk about getting your student loan to pay the deposit. You should be warned that in the current climate, the banks will only accept exceptional applicants with exemplary credit histories. If you are a student and therefore unemployed, its a strong possibility they may decline you.

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Originally Posted by Ph4ZeD

You talk about getting your student loan to pay the deposit. You should be warned that in the current climate, the banks will only accept exceptional applicants with exemplary credit histories. If you are a student and therefore unemployed, its a strong possibility they may decline you.

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Going to get my mum/brother to apply using their name and then have me meet the pay the monthly payments as in order to get almost any form of finance you've gotta be working 16 hours a week :stop:

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Originally Posted by Sacred

So how exactly does the SCAN finance work? To me it looks pretty complex with a hefty APR on the buy now pay later options.

Basically if I were to get £1k's worth of components from SCAN and get them through their finance option on buy now pay in 9 months time, I would be able to clear the finance before the 9 months was up and avoid the extortionate APR that they show in the example?

(Am pretty psyched that I might be able to get finance on the components themselves as would make building a machine much easier giving me time to save up)

:rules:

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Scan (V12 Retail) finance works like this: They give you a % interest rate, then don't stick to it when you go through the finance procedure. I applied for finance based on a quoted 15% rate, which I put into an online calculator.
V12 came back with something £100 more. So No idea where they get their numbers because they lied.
Opinion: DO NOT EVER USE V12 retail finance.