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Balanced Payments

Balanced Payments

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Balanced Payments Car Finance

Are you exploring options for financing your next vehicle? Let’s introduce you to Balanced Payment Plans – a flexible and often advantageous way to finance your dream car. Unlike conventional finance options, a Balanced Payment plan is a unique arrangement where your monthly payments are linked to a lender’s reference rate, leading to variable repayments. This means that your monthly costs may fluctuate, whilst a risk of this finance product it also offers potential benefits when interest rates are favourable. Ideal for the informed investor or discerning buyer, these plans provide an alternative to the fixed payments seen in standard Hire Purchase or Personal Contract Purchase agreements.  

At Magnitude Finance, we specialise in these dynamic payment options, offering tailored solutions to suit your individual financial landscape. Our experienced team have three decades of knowledge and expertise, all channelled to finding you the best possible finance option with the most favourable interest rates so you can drive away happy. 

Looking for a quote? Our concierge team specialise in bespoke products like this, for more information click here.

Hire Purchase

What Sets Balanced Payments Plans Apart?

Balanced Payment plans distinguish themselves in several ways from other finance options. While Hire Purchase agreements, whether they include a Balloon payment or not, and Personal Contract Purchase deals typically use a fixed interest rate, Balanced Payment plans feature monthly repayments that vary according to the chosen lender’s reference rate. For some customers, these plans offer the option to offset a Balloon payment, but this isn’t suitable for everyone — it’s crucial to discuss your specific needs with our dedicated and expert concierge team. You can contact our concierge team here.

Our access to these special offers stems from our long-standing relationships with numerous lenders, relationships we have nurtured and cultivated over years. As a broker, we bridge the gap between these financial contacts and our clients. You can trust us as your partners to find the best possible deal, thanks to our established connections, which are typically beyond the reach of the public. 

Understanding the Mechanics of a Balanced Payment Plan 

It’s simple — after paying an initial deposit, the price of the vehicle you want to finance is split over the duration of your contract with monthly repayments going toward the total cost of the car. At the end of your contract, any further variation in interest is then reconciled, before being settled as either a credit to your account or a charge, depending on the fluctuation.  

 Whilst a Balanced Payments plan could, from the onset, appear to be similar to a Hire Purchase agreement, the difference lies in that HP finance deals include static, fixed monthly repayments. With Balanced Payments, your monthly repayments may change, and could be more appealing should the interest rates fall in your favour. 

8.9% APR Representative. We are a credit broker, not a lender.

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Hire Purchase

What are the risks of variable rate agreements?

As with all finance options, there is some inherent risk involved. A Balanced Payment Plan is no different.

Financial decisions should always be well-considered and thought through properly before committing to any kind of long-term strategy. Whilst the benefits are clear when interest rates fall, note that they can also rise, meaning you’ll be required to pay more than you may initially have thought at the beginning of your Balanced Payment Plan.

Another factor to consider is the possibility of penalties for early repayment, which can limit flexibility if your financial circumstances improve, and you wish to settle the debt sooner. While offering the benefit of predictable repayments, it’s important to consider these aspects of Balanced Payment Plans in the context of your overall financial strategy.

No Fixed Monthly Payments – A Flexible Approach 

With a variable rate changing your monthly payments, it could be easy to miss the opportunities that this affords. Interest rates fall as well as rise, meaning that Balanced Payments can be a smart financing decision to those with the know-how. At Magnitude Finance, we understand your personal financial landscape before offering advice. Our process includes setting a monthly budget, conducting a soft credit check, and pairing you with a dedicated account manager to guide you through your car finance journey. 

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Early Settlement Options 

At Magnitude, potential savings can be found thanks to reduced interest penalty options should you choose to settle your Balanced Payment agreement early – which you can easily discover with our handy on-site Settlement Calculator for a straightforward estimate. 

By opting to settle early before the end of the agreement, you may be subject to further charges or penalisations, as this facility doesn’t offer the protection of the Consumer Credit Act. This may apply to you if you are entering into this contract for business purposes, making Balanced Payment plans non-regulated, in order to gain access to the benefits of variable-rate finance. 

Ready to Start Your Journey With Us?

Call 01943 660978 or fill out the form below, and our concierge team will get in touch for a straightforward, no-obligation chat.

8.9% APR Representative. We are a credit broker, not a lender.

Contact the concierge team