Your new bond represents at least a few years of tight budgeting.
Chances are you have expended a lot of your cash in the process of buying and moving into your new house. Rob Katzen, CEO of the Teljoy Group, says this could leave you wondering how you could possibly furnish your new home.
In this economic climate, or any for that matter, he says credit agreements are not the ideal option. Periodic hikes in the repo rate are likely to affect your bond repayments sharply, and if you’re more exposed due to additional credit deals, you’ll see any extras in your wallet disappear quickly.
According to the South African Human Rights Commission (SAHRC), of the 19 million credit active consumers in South Africa in 2015, half had impaired credit records. This means that they have accounts three months or more in arrears.
Thankfully, there are alternatives to credit. Rent-to-own (RTO) has gained popularity with consumers in recent years, and with good reason.
Katzen says he has seen this growth first hand. He says they have seen demand from consumers for a way to get essential household items without burying themselves deeper in debt.
For those who have moved homes, the biggest challenge can be tackling the mountain of paperwork and identifying hidden costs. With RTO agreements, Katzen says the paperwork is limited and there are no hidden fees. Rather, there is a simple monthly rental which includes installation charges and a comprehensive maintenance and risk plan.
Rob says with their plan, for example, if the appliance needs to be taken in for servicing for an extended period, the company will provide you with a loan device. The RTO contract also covers theft, lightning, accidental damage, and so on.
“This is ideal for homeowners whose budgets may take a sudden knock.”
He says in a standard credit agreement, you’d be locked into repayments.
The wide range of goods currently available for new homeowners to rent include televisions and related audio visual equipment, large kitchen appliances such as fridges, dishwashers, stoves and washing machines.
Homeowners can also rent laptops, tablets, gaming products, bedroom and dining room suites, recliners, gas braais and miscellaneous kitchen appliances like kettles and blenders.