When you need to buy a specific product, but you don’t have the money for it, there are two options left - a loan and an installment plan. We tell you how one method differs from the other and what pros and cons each has.
What is the difference between a loan and an installment plan?
The main difference between a loan and an installment plan is the presence of interest. When using a loan, the client has an interest rate, but with an installment plan, there is none. In fact, you can take out a regular loan, but for you it will be considered an installment plan, since the seller has already paid the interest to the bank.
Another important difference between products is the purpose. Loans can be targeted, and then you do not receive cash, but only a product or service. But there are also non-targeted loans, when you can spend the money on anything. With installments, there can only be one purpose - buying a product. And you get the product, not money.
There is also a difference in the loan term: with an shandong mobile number database installment plan it is from 6 to 24 months, and with a consumer loan it is up to 5 years.
Types of installments
On the Russian market it is presented in four varieties:
from a bank. You buy a product in a store, and the seller immediately receives money for the purchase. It is transferred to the bank, to which the product is sold at wholesale cost. For the buyer, the loan amount is equal to the purchase price, but in fact it is a loan;
from the store. It is provided by the seller without the mediation of the bank and most often requires a down payment. The buyer pays the remaining part of the cost in equal payments. This method of purchase is characterized by high risks for the seller, and therefore is rarely used and for trusted clients;
installment cards . These cards are similar to credit cards, as they offer a strict limit that can be spent on various purchases from the bank's partners. The list of partners is limited, and if you miss a payment, interest begins to accrue;
BNPL services. These are online markets that operate on the “Buy Now, Pay Later” scheme. The abbreviation comes from the English Buy Now, Pay Later. You can order a product and pay for it in installments — a total of four to six payments are established.