Guaranteed consumer funding is a type of

credit Credit (from Latin verb ''credit'', meaning "one believes") is the trust which allows one party to provide money or resources to another party wherein the second party does not reimburse the first party immediately (thereby generating a debt), ...

similar to

layaway Layaway (''lay-by'' in Australia, New Zealand, and South Africa) is a purchase agreement in which the seller reserves an item for a consumer until the consumer completes all the payments necessary to pay for that item, and only then hands over the ...

, which allows consumers to purchase items on a payment plan regardless of their

credit history :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...

. This process requires signing a

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

in which the consumer promises to make all of the payments in full by their due date. In return he will receive guaranteed credit and are allowed to use the product as he pays it off. With this type of

loan In finance, a loan is the lending of money by one or more individuals, organizations, or other entities to other individuals, organizations, etc. The recipient (i.e., the borrower) incurs a debt and is usually liable to pay interest on that d ...

the consumer does not receive his purchased items right away, as he would using traditional credit purchasing methods. Instead he is expected to make a

predetermined Determinism is a philosophical view, where all events are determined completely by previously existing causes. Deterministic theories throughout the history of philosophy have developed from diverse and sometimes overlapping motives and consi ...

number of timely payments as a show of good faith. If those requirements are met, the consumer may collect his purchased items and continue to make the payments until the contract has been fulfilled and the item has been paid off. However, the item will cost as much as four times the actual value of the item. There have been many complaints from people that they did not get the item, even after it was paid for in full. Due to the nature of the

purchase Purchasing is the process a business or organization uses to acquire goods or services to accomplish its goals. Although there are several organizations that attempt to set standards in the purchasing process, processes can vary greatly between ...

and the terms of extended credit, generally these services do not have a cancellation or refund policy. However this information must be part of the signed contract in order to be enforced. Along with

secured loan A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan, which then becomes a secured debt owed to the creditor who gives the loan. The debt is thus secured against the collateral, an ...

s / credit and layaway programs, guaranteed consumer funding is a good way to help re-build

bad credit Bad Credit was a comedy hip hop duo based out of San Diego, California which lasted from 2002 to 2008, fronted by musicians and comedians Matthew Gorney (Optimus Rime) and Dallas McLaughlin (Dr. Cliff Mixtable). Self-described as "financial hip ...

and establish

for those without. Many "

Credit Repair :''This article deals with the general concept of the term credit history. For detailed information about the same topic in the United States, see Credit score in the United States.'' A credit history is a record of a borrower's responsible repay ...

" claims are scams. Seeing a payment contract to completion generally results in a positive report to the

credit bureaus A credit bureau is a data collection agency that gathers account information from various creditors and provides that information to a consumer reporting agency in the United States, a credit reference agency in the United Kingdom, a credit report ...

on your behalf. If a contract is signed for the guaranteed credit services, then the consumer is protected by the

truth in lending act The Truth in Lending Act (TILA) of 1968 is a United States federal law designed to promote the informed use of consumer credit, by requiring disclosures about its terms and cost to standardize the manner in which costs associated with borrowing ...

which requires lenders to fully disclose all terms of the agreement to potential customers. These terms include but are not limited to: duration of the loan, required payments & their due dates, cancellation / refund policy, availability of the merchandise, and total cost to the consumer.

References

{{reflist
LA Times - The Lowdown on Layaway, Credit Card and Check TransactionsFederal Trade Commission- Facts for Businesses Offering LayawaysUniversity of Florida - Layaway Purchase PlansSt. Petersburg Times - The Unlost Art of LayawayFederal Trade Commission - Facts for Consumers
Credit

See also

References