Purchase by Installment Loan – Good idea?
There are many online stores that offer it nowadays, buy on installment. But this is a good idea or you just pay way too much for the product you get. It is usually not about a pair of socks, but mostly about expensive electronics or white goods where the price of the product can go up to more than 1000 euros.
On the other hand, it is easy, you do not have to do anything extra because everything is arranged for you. But let’s take a look at the current costs, not just of the credit you take out with installment purchase, but maybe you pay more for the product you buy than if you just pay in one go. With a little comparison you can see if the costs of not rising so that you might be better off requesting a loan elsewhere so that you can pay your order in one go.
Purchase by installment
It is of course a tried and tested means to generate extra revenue for web stores to make the payment they can make spread payments possible. This form of credit often has a higher interest rate than when you apply for a loan elsewhere, for example a revolving credit or a personal loan.
With a little careful, you can see that various online stores offer this with interest rates which can be as high as 14%. On the other hand, there are also online stores that have just stopped doing this, or simply don’t offer it anymore.
Of course, providing this service requires a whole administration, and you should not forget that the government is watching whether these credits are offered according to the rules. Below I will list some large web stores to see if they offer installment payments and what this may cost.
You can buy something without having enough cash to pay the full surrender amount. For example, your washing machine suddenly breaks down? Then you can purchase a new washing machine from many (web) stores in household appliances without having to pay the full purchase price immediately.
in multiple installments. You pay for the washing machine in several installments. Purchase by installment is therefore a deferred payment. With periodic payment it is established within which period the purchase price and the interest costs must be paid. It is also fixed what amount you pay per term. This amount consists of repayments and interest. Do you buy on installment? Remember that you usually pay much more than a buyer who pays the purchase price in cash.
Is installment buying smart?
Buying on installment, buying now and paying later, seems very attractive. You can buy an expensive product without having enough cash. Remember that this option to buy expensive products does have a hefty price tag.
It is not uncommon for web shops and mail order companies to let their customers pay the maximum interest rate. This rate is more than 15 percent. For example, the additional interest costs of this attractive payment option, especially with payments in many installments, can be high.
Tight in the greenhouse
Are you short of cash and have you, for example, purchased a new television on demand from a mail-order company? You must then be able to pay the agreed installment amount each month. Do you not pay on time? Then you will be confronted with extra costs (a fine). Do you think it will be difficult to have enough money left over every month to pay a fixed installment? Then it is unwise to buy an expensive product on installment. There is a good chance that your financial worries will increase.
An installment kitchen
Are you looking for a new kitchen? There is a chance that the kitchen vendor will make you the offer to purchase the kitchen on installment. Remember that credit installment does not provide a tax benefit. You can therefore take a personal loan much better to finance a kitchen. Loans taken out to improve your own home are tax deductible. Take advantage of this tax benefit. The amount to be repaid is lower and the term of the loan is shorter than when buying the installment kitchen.