Hire Purchase

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Hire Purchase

Meaning:

Hire Purchase (HP) is defined as a method of buying goods by paying in installments, where the buyer gets the product first, but ownership is transferred only after the final payment is made. In simpler terms, you hire the product now, pay gradually, and become the owner after full payment.

Example:

For example, if you purchase a washing machine through hire purchase, you make monthly payments until you have paid the full amount, at which point the machine is officially yours.

How to understand Hire Purchase:

This method makes it possible to buy expensive goods, like cars or electronics, without needing all the cash upfront.

It provides a structured way to pay for items over time, which can help with budgeting.

Importance of Hire Purchase:

Hire purchase helps individuals and businesses acquire necessary items while managing their cash flow.

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Hire Purchase

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