Installment purchases are common. There are pros and cons to it. If you need a new laptop, a new car or a washing machine, and you are short on cash, purchasing on installments can be a good idea. After all, if you don’t have any money, buying on installments is easy. You then pay a (small) amount every month and do not need to have a lot of money to make a large purchase. However, if you buy too much in installments, the monthly financial obligations can increase considerably. Buying or paying in installments is almost always more expensive than paying the amount in one go. Installment purchase , what is that? Installment purchasing involves purchasing while repaying an amount monthly. This can be a small or large amount of money. For example, if you want to buy a laptop on installment . When purchasing expensive items such as a laptop or washing machine, this often involves small monthly payments, such as the online home stores Otto or Wehkamp. You can then pay off larger amounts from approximately 15 euros per month. For example, a household appliance, a laptop or computer or a sofa. There are more companies, including mail order companies, where you can buy on installments.
Pay off money when purchasing. Do not pay in one go
No money and still able to buy. That is the premise of installment purchasing. Quite a few stores allow you to buy and pay later, or buy and pay in monthly installments. In such situations you almost always pay more for the product than if you pay in one go. You can also buy anything online and you can often pay off expensive items in monthly installments. Repayments continue until you have paid the total amount, plus the additional interest charged. For example, monthly payments can continue for up to three years. There are many more companies where you can buy on installments.
Mortgage credit, or the repayment of a car
For some products it is almost always standard that you purchase on installments, such as when purchasing a car. This involves large amounts of money and hardly anyone has that much money in the bank. For example, you almost always buy a house through a mortgage loan . You take out a loan for this that can last twenty to thirty years. You then repay monthly. A few hundred or more than a thousand euros per month, depending on the purchase amount, your income and age. This is of course not necessary for smaller purchases. You can then choose to buy on installments or borrow from a lender.
Advantages of purchasing by installment
The advantage of purchasing on installments actually speaks for itself. You can buy something expensive without having to pay the entire amount at once. If you urgently need a laptop or washing machine and you are short on cash, then installment purchasing may be the right choice for you. Nevertheless, there are also disadvantages to purchasing on installments.
Disadvantages of purchasing by installment
If you buy something on installment, you pay more than the original purchase amount. This is because interest is charged on the repayment. You are, as it were, borrowing from the seller. The repayment can continue for several years and so a small monthly repayment amount can ultimately become a significant burden on your income. Particularly if you buy several items on installments, the monthly amount can increase considerably. Do not buy impulsively, but consider an installment purchase with care. Don’t decide right away, sleep on it. Take a good look at your monthly costs, any debts and your income. Can you really afford to pay the monthly amount during the term or would it be better to save for a while?
What is the cheapest way to buy and borrow?
The cheapest way to buy something is to save for it. Borrowing from a lender always costs extra money and if you don’t really need the stuff, don’t buy on impulse but save for a while before you buy. If you want to buy something very expensive on installments, consider a credit loan. That can be cheaper than buying on installment. In an emergency, you may be able to borrow from family or acquaintances. Make sure you stick to the agreements made regarding repayment, because a lot of arguments are made about money.
- Borrow money from family or friends
Buying by installment, when?
Installment purchase is necessary if you need something very badly and if you can pay the installment amount, but cannot pay the full purchase amount at once. It is of course important that you are sure that you can pay the monthly repayment without getting into trouble. For amounts above 3,000 euros, it is better to consult a lender. You may pay proportionately less interest from that amount.
- Otto, how do you create an account?
- Wehkamp, how do you create an account?