Stores often offer the purchase of products in installments, which is often used by people for whom a larger one-time expense is too much a burden. Attention is paid by 0 percent installments. Does the tempting offer really require repayment of a certain amount without any additional fees?
Shopping in the installment sale system with a 0 percent installment can be beneficial, but you must first pay attention to the terms of the contract. Zero interest on installments does not always mean no costs.
Installments for 0 – what is an installment purchase?
Before we look at the zero percent installment magnifying glass, we’ll check what installment purchases are all about.
When you are thinking about buying, e.g. new household appliances, e.g. a washing machine, a multi-functional food processor or a television, you will first be wondering if you can pay for it in cash. If you don’t have enough funds, you can use a cash loan. Remember that there is a third option, i.e. installment purchases.
Installment purchases are a type of loan where the store, as an installment sales organizer, mediates the conclusion of the contract. Purchase of any product in installments makes you become a borrower, i.e. the debtor of the bank with whom this store cooperates, and you will pay the installments according to the schedule presented.
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You must complete a loan application to be able to pay in installments. In most cases, the bank will check your payment credibility. Purchases involving small amounts may be an exception.
Installments 0 percent – when are they actually profitable?
If you are thinking about buying in installments, I will tell you what the 0 percent installments are, so that you avoid disappointment and know which offers are worth considering. Shopping at installments with zero interest attracts customers because they mean that you don’t have to spend a lot of money in one go.
This solution seems ideal, but remember that real 0 percent installments mean that you pay in installments exactly as much as the product costs, i.e. the same amount that was borrowed by the bank.
If you buy a TV set for PLN 3,000, you will pay 10 installments of PLN 300 each, and no more. Only then is zero interest rate real and profitable. You can opt for 0 percent installments over the internet because online stores also offer free installments on the same basis as landlines.
Installments of 0 percent are not only a marketing ploy, but before you sign the contract, read its terms and conditions carefully so that you won’t be surprised by the additional costs. Zero interest rate can only concern the issue of interest.
Installments 0 percent – additional costs and sales tricks
Not every 0 percent installment promotion will benefit you. Ask about the APRC, because the interest rate may indeed be 0 percent, but this does not mean that the customer does not incur any other costs. Additional fees mean that you pay the same or even more for a regular credit or cash loan. The costs that installments may incur without interest are:
- commission charged by the bank,
- compulsory insurance – the bank will not grant an installment loan without the borrower’s consent to insurance.
Even if for the goods bought in the installment system we would pay exactly the same as for those bought for cash, it is worth checking if the same product in another store does not cost less.
An 0 percent installment offer may mean that you will not pay anything more than the price of the product, but only if you repay it within a certain period of time, e.g. six months. However, a longer repayment period will involve adding interest, commission or insurance to the loan. Also pay attention to the suggestions for a paid extension of the guarantee, because the requested fee is sometimes 20-30% of the product price.
Interest-free installments – an incentive for more expensive and larger purchases
Zero interest rate means that customers are more likely to make purchases that they did not plan. It is also easier to buy more expensive goods and additional products that seem attractive. In this way, it’s easy to fall into the trap of shopping and thus a spiral of debts. Therefore, the decision to buy goods with 0 percent installments should be tailored to your real needs.