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Payday Loans Help Pay Back -Haccpcleaning.Info Uncategorized Comparison: Purchase on installment or consumer loan?

Comparison: Purchase on installment or consumer loan?



If you are missing out on money and would like to purchase a particular item, there may be many ways to fund your purchase. If you want the freedom to decide for yourself what you want to spend money on, you can choose to borrow money for example by taking a private loan. If, on the other hand, you lack money for a particular item, it may be a good idea to choose a purchase on installment.

At several companies you have the opportunity to buy what you need without having to pay immediately. Here you are allowed to buy a product and distribute the payment over a longer period. Just like with a consumer loan, with installment purchases you can afford the things you want. Both a loan and installment purchase can be great ways to fund your purchases if your mobile suddenly breaks down.

However, it can be difficult to see what the installment actually costs as you pay the amount over a longer period. Therefore, it is a good idea to check if installment or consumer loans are the best solution for you. You can read more about this in this article.

What does purchase on installment mean?

What does purchase on installment mean?

When you purchase on installment, you enter into a credit agreement with the retailer of the item you wish to purchase. This means that the dealer gives you credit and that you defer payment for the product or service that you buy.

With a payment scheme, you will typically defer your payment for either 6, 12, 24 or 48 months. So you won’t pay for your purchase right away, but instead enter into an agreement where you have to pay a fixed amount each month.

As with a regular loan, you pay interest and, in some cases, setup fees, to be allowed to distribute your payment over a longer period. Therefore, you can quickly end up paying more for your purchase than expected. At some companies, it is possible to get a purchase on installment free of interest. However, here you should be aware of how much you have to pay in fees.

Comparison: Purchase on installment or consumer loan

Comparison: Purchase on installment or consumer loan

If you are considering installment purchases, it is a good idea to investigate what it really costs to enter into a payment agreement. Here it is an advantage to compare installment purchases with other financing options to see where you can save the most money. To investigate the price of installment purchases, we have compared some of the items that you can purchase on installment.

Here you can see what it costs if you choose to buy the item on installment and what it will cost if you choose a consumer loan for a similar amount. In the graphic below you can see what you have to pay in total if you choose to pay on installment and what you have to pay if you choose to buy the item with a consumer loan.

All prices are indicative. It is possible that the above will change after the release date and that you will be offered other prices based on your finances.

To make it easier to compare the different loans, we have used our loan calculator to calculate the APR for the two types of consumer loans. The prices have also been rounded up to full amounts.

All prices are indicative. It is possible that the above will change after the release date and that you will be offered other prices based on your finances.

At some companies, you will have the option of entering into a payment agreement where you do not have to pay interest. Therefore, you can also easily find cases where installment purchases are cheaper than a loan. The price examples are thus only indicative.

Pros and cons of buying on installment

Pros and cons of buying on installment

Since buying on installments can be seen as an alternative to consumer loans, it is worth knowing what the advantages and disadvantages of buying on installments are. Therefore, we give you here an overview of both advantages and disadvantages.

Benefits of installment

You do not have to pay right away.

It is available around the clock.

You have the option to postpone the payment.

Disadvantage of installment

You are bound to a specific product.

High interest rates if not paid on time.

There may be high credit costs.

If you prefer to borrow a smaller amount over a shorter period, you can choose a quick loan. Here, as with a consumer loan, you are not tied to a specific product, and the maturity of this type of loan is often much shorter than that of ordinary consumer loans. 

However, if you choose to finance your purchase with a quick loan, you should be aware that quick loans often result in higher interest rates than with ordinary consumer loans. Therefore, it can quickly become an expensive solution. Therefore, if you already have several loans, a new repayment loan may not be the right solution for you.

Where to buy on installment?

Payment with installment is done both online and in the physical stores. On the web you can find many webshops that offer you to split the payment and thereby pay over several months. In these cases, it is not the store that lends you money, as it typically goes through a provider. 

Providers allow you to split the payment over a longer period when shopping online. Instead of paying directly at a webshop, you will instead be forwarded to the provider for your agreement and in future pay the monthly installments to the provider with which the webshop cooperates. 

Although you can easily show up at the store and buy on installment, most stores offer that you can ensure in advance that your installment agreement is approved. They do this by allowing you to apply for the payment agreement as you wish on their website . However, if you are uncertain about the terms of your purchase or want terms other than what is made on the website, it is a good idea to show up at the physical store.

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