Get Law 553 Retail Installment Contract Sample

Pros of Installment Contracts Having more flexibility and fewer formalities are two advantages both sellers and buyers benefit from. For sellers, one benefit comes in the form of tax advantage from receiving payments over an extended period of time.

The difference between an installment loan and a personal loan is that an installment loan can be any type of loan paid off in regular intervals over time, while a personal loan is just one example of an installment loan. All personal loans are installment loans, as are car loans, mortgages and home equity loans.

A retail installment sale is a transaction between you and a dealer to purchase a vehicle where, you agree to pay the dealer over time, paying both the value of the vehicle plus interest. A dealer can sell the retail installment contract to a lender or other party.

As you can see, a loan is wholly distinct from a retail installment sale contract/credit sale. In a credit sale, the creditor provides credit (not money) to the buyer. In a loan transaction, the lender provides/lends money (not credit) to the borrower.

The LAW 553 acts as both a sale document and a financing document. The dealer sells the vehicle to the consumer and then immediately assigns the loan to a finance company, which is usually a subsidiary of the manufacturer. This assignee financing company is the intended beneficiary of the arbitration provision.

The two key differences between installment and credits sales are the duration the credit is offered and the collateral used to back the credit. Credit sales are typically of shorter duration and installment sales spread payments out over longer periods of time.