In a hire purchase agreement, it involves the hirer and the vehicle, whereby the hirer agree to hire the vehicle by making prompt monthly installments to the banking institution for a specific period of time and subsequently purchase it.
A common problem associated with hire purchase financing is the effect of not making the monthly payments on time which will lead to repossession of the vehicle.
This problem usually occurs when the hirer defaults on the monthly installments. Thus, the banking institution as the owner has the right to repossess the vehicle under two circumstances whereby;
• No payment has been made for 2 consecutive monthly installments
or the final installment
• There is a default in payment for 4 consecutive monthly
installments in the case where the hirer is deceased
If there is a guarantor for the above case scenario, then the guarantor will be responsible for the non-payments. Therefore, is is highly advised not to delay the monthly installments to avoid repossession of the vehicle.
Remember, the balance due will continue to increase for as long as the hirer is subject to late payment penalty. It is best to contact the bank to discuss further if there is a problem involved.
Read More : http://MyFinance.com.my/articles/detail/9121411410
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