Comparing Computer Loans and Using Credit

Computer loans can come from traditional and alternative lenders. Traditional lenders, like banks, may offer some key advantages like revolving or flexible credit. Retailers who offer to finance your purchase may offer lower interest rates. When you are comparing, pay attention to the issues that matter most to you.

Cost of Financing

It is traditionally less expensive to finance a computer through a retailer. These companies have an incentive to source the loan; they want you to make the purchase. Some may offer low to no interest financing for a short period of time.

Loan Terms

Traditional lenders typically offer better terms. For example, if you buy your computer on a credit card, you can choose how much to pay back each month. Typically, most lenders do not require that you secure the loan with the computer, meaning your computer will not be taken if you miss payments.

Pitfalls

There are downsides to both types of loans. Look out for adjustable rates on retailer loans and on revolving credit lines. These rates can cause a huge spike in the cost of ownership of your computer. You should also be careful about long terms because a computer is a small enough purchase that can typically be paid in full in one year.


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