to both planning our entertainment and the purchase of household appliances, accessories, and clothing. But not everyone can afford to update their wardrobe or buy a new phone. For this reason, loans and installments have been invented. They are designed to make our lives easier and give the opportunity to buy a little more than we can afford at a particular moment. For those who still do not understand the fundamental difference between credit and installments, we have prepared some useful information.
Installment vs Payday Loans – Any Difference?
Installment services are to some extent an alternative to bank consumer lending. They have some advantages: firstly, there is no intermediary in the form of a credit organization/ bank between you and the seller. As a result, you get the opportunity to save money on interest, while the seller can realize more goods thanks to installment payments. If you do not know what installment is, we are ready to provide you with a detailed explanation. Installment is the payment of the goods cost in equal parts without additional interest and overpayments over several months. Thus, you can purchase anything and pay for it later.
What to focus on when you signing a contract requesting low-interest installment loans?
- No additional overpayments in a form of fees and commissions. Of course, the quote paid in installments will differ since the seller has the right to increase the price by a certain percentage;
- The contract should not mention the bank. Installment is provided by a store or a manufacturer; banks do not give installments but loans;
- Usually, the maximum installment period is not more than 2 years;
- The minimal payment is 30 of the value of the goods;
- The seller can not claim penalties; the only case for applying a penalty is the violation of the contract terms.
The only thing is that the seller can charge a particular amount for the registration of the agreement and the documentation, but the amount charged for the procedure is insignificant. The arrangement of the installment contract is similar to the process of the loan agreement conclusion. At the same time, the questionnaire is filled in, and the client’s solvency is checked. The number of requested documents is determined by the seller. Someone will only need a passport with local registration; however, there are also those requesting a certificate from the place of work.
What should be mentioned in the installment agreement:
- Detailed information about the seller and buyer,
- Full name of the product/ service being purchased;
- The prepayment as a percentage of the total cost and the amount;
- Payment schedule by months and total amount to be paid, including prepayment;
- Full list of payment methods.
A distinctive feature of installments is that the money is given to the seller directly, without involving third parties.