Why Renting to Own is Not All that It's Cracked Up to Be

Not everyone has good credit, let's face it, stuff happens, and sometimes no matter how hard a person tries there is nothing they can do to stop their credit record from going into the toilet. People lose their jobs, get injured during a period when they have no health insurance and myriad other things, any and all of which can quickly destroy your credit score, making it nigh onto impossible to purchase many things, including a home. That's when some companies and property owners got downright enterprising, they came up with the whole rent-to-own idea.

Basically rent-to-own is just what it sounds like, you purchase an item and make monthly payments on it until you pay it off. While there is no interest per se, there might as well be. While rent-to-own sounds like a good deal initially, in reality it is just another way for your money to go down the drain quickly. Oh, and if you stop making payments for any reason you can get into real trouble; you can have the property repossessed and even mess up your credit record worse than it already is. While the idea of making a small monthly payment on an item until it is paid off seems like a good deal, especially if you need an item badly, it really isn't. Once you do the basic math, it quickly becomes apparent that to purchase any item over a long-term period this way, you will wind up spending twice or three times what the product is actually worth.

Another thing to take into account is that while you don't pay interest, if you live in a state that has a sales tax, you will have to add the cost of that into your total payment as well when you are doing the basic math.