Most chain stores and business in South Africa have some kind of monthly instalment option on larger purchases with the trade off almost always being that you end up paying more for that purchase due to interest. Now online retailer Raru is offering an alternative that lets you buy an item and pay it off over six weeks without interest.
Raru is doing this by adding Payflex as a payment option on its site. The Payflex model is such that your purchase needs to be paid off in four instalments over those six weeks.
Raru’s announcement of this payment option is a bit sparse, so we got a few more details about the system from Payflex’s local site because, as expected, there are some caveats.
Firstly the amount of whatever you’re buying is cut up into the aforementioned four payments with each of them being 25% of the overall cost. The first 25% needs to be paid immediately, at which time the transaction will start and the merchant (Raru in this case) will pack up your item(s) and send them to you.
After this the next 25% is due in two weeks, 25% after four weeks, and the final 25% within the six weeks.
The difference between Payflex and regular instalment payments, is that you won’t be charged interest if you pay the full amount within the six weeks. If, however, you miss one or more payments, that’s when fees will be incurred.
“There’s only one time you would ever pay more … if you miss a scheduled payment, then sadly, we’ll have to charge a R65 (incl. VAT) default fee to cover our costs and a further R65 (incl. VAT) for every week the instalment is outstanding for a maximum of three (3) charges,” the Payflex FAQ reads.
If you are thinking about using this system we highly recommend reading that FAQ page as well as the terms and conditions which covers more about the legal side of things.
Back to Raru-specific details and a minimum spend of R750 is required for Payflex to be an option.
As always we have to stress not to spend more than you can afford, even with options like this to spread the cost over multiple payments. At best you can damage your credit score, and at worst it can lead to the courts. On that last point, Payflex states (in bold) in their terms and conditions:
“We may approach a court to take judgment against you for the debt owed by you to us in terms of this agreement. If we do, a certificate signed by any one of our managers (whose appointment and authority need not be proved) stating the amount that you owe us and the applicable interest rate, shall be accepted as sufficient proof of your indebtedness and shall be deemed correct unless you are able to prove otherwise.”