Paying for Products by Installment or Credit?
Is it worth paying in installments or do you already have a suitable loan product for installment purchase? You do not necessarily need a new loan, as this is practically the installment if you already have a viable financing solution.
If the buyer is not attentive, the installment agreement may come with a certain amount of credit. It’s a good idea to be careful before you click on shopping carts and checkout, because getting that credit is not always very accurate.
Here’s how to pay by installment:
Paying by installments is a handy feature when it comes to a high-priced, non-payable purchase. And even if for some reason you don’t want to pay the whole amount at once. Purchasing more hundreds or thousands will make a big dent in your monthly salary.
The installment, of course, works in such a way that the buyer does not pay the whole amount at once, but receives a payment period for his purchase, during which he pays a monthly installment. Usually, for example, when a telephone is purchased in installments, the payment period is 6 to 36 months.
This gives the buyer immediate access to the equipment or other purchase, but only owns it once the purchase price has been paid in full. In practice, the seller has the right to claim the product if the charges stop for any reason. Something to think about when considering payment options.
Credit or Installment?
Does it matter if you choose to pay by credit or by installment payment? Of course, the most important selection criterion is ownership, that is, if you pay for the purchase all at once, you get the title right away, even if you paid for it on credit. It is also worth comparing your loans and considering what kind of loan would suit your situation and possibly other purchases in the future.
Of course, unpaid invoices will cause problems in this case too, but the shop cannot demand a refund. There are other things to consider:
Only one invoice per month
It’s a good idea to concentrate your purchases when you buy in installments, so you don’t have to manage multiple payments for multiple parties. The more invoices you have to pay, the more difficult it is to manage your monthly costs.
Alternatively, you can pay for your purchases with a credit, the repayment of which is like a down payment or a monthly installment on your credit card. Such credit is not earmarked for a specific purchase, but can also be used later to help with other expenses.
What does the product pay in installments?
If you hit a good seam and receive a partial payment on the offer at no cost and no interest, the payment method will not affect the total amount. However, you should check that this offer is not limited to part of the payment period.
Before you buy, you should dig up the calculator and calculate what the full installment payment will cost, as the monthly installment and payout period may obscure the total amount.
If the installment affects the total amount of the product, it is of course necessary to consider whether the difference is such that payment by installment is worthwhile. Sometimes paying with credit becomes cheaper than paying by installment.
Do you also receive discounts on installments?
Many buy the latest home electronics from discount stores and save hundreds. Still, the purchase price can rise so high that it is difficult to pay in one go. For example, a computer hire purchase is a popular discount purchase.
But does the buyer lose something when he chooses a installment in this case? Sometimes, the reduced price bounces bouncing around to almost normal prices when not paid in one go.
Remember the APR
An installment contract is also a credit agreement and the loan is usually paid interest. The installment agreement must therefore be treated like any other loan product and bear in mind the annual percentage rate of charge. The annual percentage rate of charge for a product bought in installments may rise unexpectedly high.
The actual APR tells you the amount of costs and interest accrued on a loan and makes it easy to compare the prices of different types of loans.
Alternative to installment payment
An alternative to the installment payment offered by the shop is a flexible loan. With this type of loan, you can shop at different stores and still receive only one invoice. And still pay in installments for all your purchases.
Good Finance comes back to you as you pay off monthly installments and use it to fund new purchases again.