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Features Of Hire Purchase Agreement
The notice period is one week if the rent is payable per week or less than this interval and, in other cases, two weeks. Rent to Own agreements are also excluded from the Leases Act in the Lending Act, as they are considered leases and not a credit extension. Rental purchase is defined as an agreement in which the owner of the assets has them rented for regular payments paid by the tenant. The tenant has the opportunity to acquire and own the asset as soon as all agreed payments have been made. These periodic payments also include a component of the interest rate paid for the use of the asset in addition to the price of the asset. The term “Hire-Purchase” is a British term that, in various other countries, is synonymous with “Rent-to-Own” or “installment payment plan”. Holding property through rental and purchase allows companies to improve their returns. This system is not only beneficial for the tenant, but also the most efficient and safest form of credit sale for the current owner of the asset. We can say that the lease agreement is like lease agreements where it is possible with the lessee to buy the asset at any time during the term of the lease agreement, and as when buying the lease, the property is transferred only at the time of payment of the last instalment, there is more protection for the seller, because the asset can be withdrawn if payment of the instalment amount fails.
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