Why shold I try to put a down payment on an item I want to purchase?
There are two reasons for down payments. By paying a part of the purchase price in advance you reduce the money you are borrowing. This will save you on interest expense and saving money is a good thing.
If you are requesting financing on a larger item and have little credit, this can increase the chances of finding a lender willing to help you with the remainder of the money you need. Your down payment increases your equity in the item. It is an indicator that you will pay the lender back because you don't want to lose what you have put into it, you will take better care of the item because of your personal investment and if the lender has to take that item and sell it to pay your debt, they will have to recover less of the money through the sale. Used property sells for much less than new and the down payment helps compensate for that.
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There are two reasons for down payments. By paying a part of the purchase price in advance you reduce the money you are borrowing. This will save you on interest expense and saving money is a good thing.
