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A financing question.

M

mrcrunchynut

macrumors newbie
Original poster
Dec 22, 2010
13
0
I'm considering buying a 13 inch MacBook Pro but will want to buy in on finance from the apple store. I notice they are offering a 10 month repayment plan with 0%APR which is perfect for me. I want to know the following (to those who have used financing in the past);

1. Is the procedure of getting the finance easy and instant?
2. In terms of payment, will the first payment be due one month after i buy the mac?

An answer to this question could decide whether I get one or not. Thank you to anyone who replies :)
 
I don't know how old you are, but going into debt over shiny new "toys" is a bad idea, and a very common mistake of young people these days. You'd be much better served to save up the purchase price yourself over the next 10 months, then just go in and buy it.

Easy credit is a trap. You aren't "financing" the laptop, read the fine print - you are applying for a high interest credit card. As an incentive, they give you the notebook for 0% for 10 months. But then you'll be tempted to use the credit card for other things, and its a downhill spiral. Also, if you miss a payment, you lose that 0% for 10 months, and it defaults to a very high interest rate.

I know you didn't ask for a lecture, but just think about saving up for it instead of going into debt.
 
mrcrunchynut said:
1. Is the procedure of getting the finance easy and instant?
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Generally yes
2. In terms of payment, will the first payment be due one month after i buy the mac?
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Depends on the billing cycle, and when you buy it. It can be about a month, maybe less maybe more.

One thing to consider is you're late on any payments during that 10months, they'll lump all accrued interest, and if you don't pay the full balance by that 10th month, even leaving a balance of a dollar, will cause all interest accrued to be lumped into your balance again. That interest rate is usually 18 to 20%, I think a loan sharks interest rate is around 15%

0% credit terms are dangerous, unless you have discipline and a good history of over paying your bills
 
dime21 said:
I don't know how old you are, but going into debt over shiny new "toys" is a bad idea, and a very common mistake of young people these days. Easy credit is a trap. You'd be much better served to save up the purchase price yourself over the next 10 months, then just go in and buy it.

I know you didn't ask for a lecture, but just think about it.
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I agree with you. Cash is always the cheapest way to buy things.
 
dime21 said:
I don't know how old you are, but going into debt over shiny new "toys" is a bad idea, and a very common mistake of young people these days. Easy credit is a trap. You'd be much better served to save up the purchase price yourself over the next 10 months, then just go in and buy it.

I know you didn't ask for a lecture, but just think about it.
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I have considered this. I am 20 and at university. If i wait a few weeks longer then i could buy it outright, but the 0%APR financing means that my wallet will not strained between now and April.

I am only considering the financing because of the APR, I would not want to pay for it over 2 years for instance and pay 20%ish on top.
 
you're going to need A+ credit to get one financed, if that's not you then don't bother. cash is always the best option for something like that.
 
Apple does all financing through Barclay Bank. You apply online, via Apple's website, and if approved, you can instantly start shopping.

They will tell you as soon as you apply if you're instantly approved. If you're declined, or they need more information, they'll tell you they'll contact you via mail.

Remember (and this is important) that your last payment has to be made 10 months from the date of your PURCHASE in order to not be charged the interest. Unless they've changed things, they'd send out a regular bill on the 10th month with a regular due date. If you pay that bill before the regular due date, but after your 10th month purchase anniversary, they charge you the accrued interest.

FWIW, Best Buy typically offers 0% APR for 18 months on more expensive purchases, like Macs.
 
dime21 said:
I don't know how old you are, but going into debt over shiny new "toys" is a bad idea, and a very common mistake of young people these days. You'd be much better served to save up the purchase price yourself over the next 10 months, then just go in and buy it.

Easy credit is a trap. You aren't "financing" the laptop, read the fine print - you are applying for a high interest credit card. As an incentive, they give you the notebook for 0% for 10 months. But then you'll be tempted to use the credit card for other things, and its a downhill spiral. Also, if you miss a payment, you lose that 0% for 10 months, and it defaults to a very high interest rate.

I know you didn't ask for a lecture, but just think about saving up for it instead of going into debt.
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100% agreed.

also it would be much easier if you just saved up for the mbp and then bought it so you dont go into debt.
 
mrcrunchynut said:
I have considered this. I am 20 and at university. If i wait a few weeks longer then i could buy it outright, but the 0%APR financing means that my wallet will not strained between now and April.

I am only considering the financing because of the APR, I would not want to pay for it over 2 years for instance and pay 20%ish on top.
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If by waiting a few weeks longer you could buy it outright, I would definitely do that, and in addition, you may know more about the updated MBPs that are coming and get the newer version to boot.
 
Unless one knows the absolutes of the OPs finances, I don't see how anyone can say if it's better or not for them to pay with cash vs. taking advantage of an interest-free financing offer. :confused:
 
Their credit requirements are pretty stringent - and keep in mind, every time you apply for credit, even if you get denied, it counts as a ding on your credit report. You're "allowed" a certain number every year, but the more "dings" you have, it can adversely affect your credit. Number of "allowed" applications per any given year varies by credit reporting agency.

I'm not saying "don't do it," but you might want to consider all the factors.
 
aristobrat said:
Unless one knows the absolutes of the OPs finances, I don't see how anyone can say if it's better or not for them to pay with cash vs. taking advantage of an interest-free financing offer. :confused:
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true...but if he was in the position to buy on credit or pay with cash, he would not have asked for opinions here.
 
Buy it when you have the money to actually buy it. Don't do it anyway else. Been there, done that. Will never do it again. I even shudder just reading this thread.
 
Sorry op, everytime someone posts anything about credit on these boards all the financial planners in the room post up and start talking trash. Never fails.

@ 20 yrs old, without some serious income you will probably be denied . I suggest buying it outright with financial aid funds (if available) or see if your bookstore offers some sort of contract for student buyers. You might be able to go barclays if you have a strong cosigner but not on your own.

Good luck.
 
Thanks for the information guys. I will wait a week or so longer and buy it when i have the funds.
I assumed that it might be as simple as setting up a direct debit but it seems it wouldnt be wise getting it on credit.
I just wanted my MacBook NOW!! ha.
 
Don't get your finance from Apple or any other company who try to get you to sign upto a credit card. First of all they will usually have higher interest rates then your own bank, and also if you got a personal loan from your bank to cover the cost of the laptop then if forever what reason in future you couldn't afford the repayements in future your bank is more likely to accept a reduced rate, where as the finance company will either lump on loads more interest, or will come to your house and take your laptop back, along with other items you own, also putting the interest on top.

If you really can't wait to save up, then get a personal loan from a bank instead.
 
I'm going to take a slightly different angle here.

If you understand all the fine-print, and can follow all of the conditions, then 0% financing is a tool that can be used to your benefit. Basically, the finance company is giving you money for a certain amount of time. For free. You can make that money work for you during that time.

They are gambling that you won't meet all the conditions, and that you will be required to pay the interest.

The interest that some people end up paying makes up for the interest that the company has lost on those who manage to make all their payments.

If you are a gambling type, you get free money if you win. And if you lose the 'house' gets your interest. If you read and understand the fine-print, and are organized... you should be able to beat the odds. If you lead a chaotic life, then the financing company probably wins.

It is a gambling operation. If you like betting on the ponies, you actually have better odds with 0% financing since you are entirely in control of the outcome.
 
Someone has probably already said it, but I couldn't be bothered to read through all of those posts. If you wait a month or so, you might know better what the new Macbook Pro's will be like, and then you might decide to wait? Or alternatively you might wait till the new one comes out and then buy yourself a second hand 2010 model which would be a shedload cheaper?
 
alex.purple.mac said:
Someone has probably already said it, but I couldn't be bothered to read through all of those posts. If you wait a month or so, you might know better what the new Macbook Pro's will be like, and then you might decide to wait? Or alternatively you might wait till the new one comes out and then buy yourself a second hand 2010 model which would be a shedload cheaper?
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I have thought of this. My view is that a year or two after this update i'll wish i had waited. I have already put off buying a Pro for nearly two years and im more than happy with what the current 13 inch Pro has to offer me.

If people always waited for the next model they would never buy one.

snberk103 said:
I'm going to take a slightly different angle here.

If you understand all the fine-print, and can follow all of the conditions, then 0% financing is a tool that can be used to your benefit. Basically, the finance company is giving you money for a certain amount of time. For free. You can make that money work for you during that time.

They are gambling that you won't meet all the conditions, and that you will be required to pay the interest.

The interest that some people end up paying makes up for the interest that the company has lost on those who manage to make all their payments.

If you are a gambling type, you get free money if you win. And if you lose the 'house' gets your interest. If you read and understand the fine-print, and are organized... you should be able to beat the odds. If you lead a chaotic life, then the financing company probably wins.

It is a gambling operation. If you like betting on the ponies, you actually have better odds with 0% financing since you are entirely in control of the outcome.
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I understand where you're coming from here, but i see it not as them lending me money, but me paying for my mac with my own money over ten months, spreading the cost evenly out over a ten month period.

Someone else has said that because of my age and finances, they probably won't let me have one on financing.
 
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When interest rates were better, I did this for several other computer/part purchases (1 year financing at 0% APR). I had the cash available up front, but financed anyway. Put the money in a CD and collected $120 interest at the end of the year. It's money I wouldn't have had if I purchased outright. Obviously this depends on your financial situation, but if you're responsible then you can make out with these things.
 
What a bunch of crappy advice...

There is nothing wrong with financing something if you can stick to a plan and pay it off in 9 months or less. Buying stuff on cash will not help you in a few years when you are looking to buy a car or house. The smart play if you can stick to it, would be to finance it and take advantage of the 0%. Make your regular monthly payments, and on the 8th or 9th month pay it off. During that 9 months, put the money in a CD or a savings account with a decent rate.

By doing this you'll do a couple things. You'll make a few bucks on that money you put away for 9 months that you wouldn't have otherwise. You will also raise your credit score by making regular on time monthly payments and then paying it off.

Of course this all hinges on using some discipline and sticking to the plan. If you can't manage your money and make the payments on time and pay it off in 9 months or less, then nothing I said above matters.
 
Do the financing, jumpstart your credit, but dont miss payments. I take up companies on 0% offers even though I can pay up front, but like others have said, you need to stay on top of your bills. If you are not organized, then don't do it. This means, you can't miss a single payment or even be late for 10 months. If you can handle that - go for it!
 
intelgrande said:
When interest rates were better, I did this for several other computer/part purchases (1 year financing at 0% APR). I had the cash available up front, but financed anyway. Put the money in a CD and collected $120 interest at the end of the year. It's money I wouldn't have had if I purchased outright. Obviously this depends on your financial situation, but if you're responsible then you can make out with these things.
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Can i ask, would I be in control of how much i can pay each month? I would like to pay perhaps half of it up front and then have it paid off before the end of the agreement.
 
mrcrunchynut said:
Can i ask, would I be in control of how much i can pay each month? I would like to pay perhaps half of it up front and then have it paid off before the end of the agreement.
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Yes you can pay whatever you want as long as you pay the minimum.

If you live in the U.S. you can get a copy of your 3 credit reports for free every year. When you do so there is an option to see your credit score for an extra $5. If your score is 720 or higher you will most likely be approved.

The actual legitimate site is here.

https://www.annualcreditreport.com/cra/index.jsp

As a few others have mentioned, there's nothing wrong with taking someones free money if you pay it back according to the terms. Doing 9 months assures you don't miss the deadline.

Cheers,
 
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