Installment is like a loan without interest: What's the catch and is there one at all?.

How to buy goods without overpayments, why banks give interest-free loans and why this is beneficial for stores - we’ll figure it out together with the Halva installment card.

What is installment plan?

Installment payment is a method of paying for goods in which the buyer pays money in installments over a certain period. He receives the goods immediately.

For example, you want to give your mother a good laptop for New Year, but you don’t have the money for it right now. If the store has an installment plan, you can pay an amount acceptable to you in December and put the laptop under the Christmas tree, and pay the rest of the amount over several months.

When buying goods in installments, you borrow not from the seller, but from the bank. He immediately transfers the full amount of your purchase to the store, and you return the funds to the bank, without interest.

Why is this beneficial to the bank?

Of course, lending money is not an act of charity by the bank. He makes money from this, receiving his interest on installments. Only it’s not the buyer who pays for them, but the store, so it doesn’t cost you anything.

Why do stores need this?

Installment plans help stores sell, as it allows the buyer to purchase the item they like right now, rather than waiting for a salary or the correct arrangement of stars. Having postponed the purchase, he may never return for it. In addition, installment plans allow customers to buy more expensive items.

Thus, by offering installment plans, the store increases revenue and remains in the black even after sharing part of the profit with the bank.

But is there some kind of catch?

Some sellers disguise the loan as an installment plan and include interest in the payment amount. But these two products are not that difficult to differentiate if you understand the difference.

When you take out an item on credit, it costs you more than the regular price. You pay not only its cost, but also the interest the bank accrues for using borrowed funds.

When paying in installments, you will pay the same amount for the product as other buyers, just not at one time, but according to a schedule convenient for you.

The nuances of pricing must be specified in the contract.

Do I need to sign a contract every time I buy in installments?

Not always. It happens that you come to the store and see the words “installment plan” on the product. To buy it, you will have to conclude an agreement on the spot with the store’s partner bank, which will pay for your purchase. With this scheme, you actually have to fill out paperwork every time you decide to purchase something.

An alternative is an installment card that can be issued by a bank. In this case, it will be enough to fill out the application once, and then just pay with a card as usual.

How does an installment card work?

You pay with the bank’s money, the card has an individual spending limit - it’s similar to a regular credit card. But there is a fundamental difference: you need to fully repay your credit card costs within a fairly short period of time. You repay the money on an installment card in equal payments, and the term depends on the store and the amount of purchase. For example, with the Halva card , the repayment period for purchases over 3.5 thousand rubles is at least four months.

You can pay with an installment card not in any store, but only in those that cooperate with the bank that issued the card. The number of partners is an important indicator: if there are few of them, you will not be able to fully use the card and will not feel the benefits.

The Halva installment card has more than 140 thousand partners, and these are not only shops, but also gas stations, pharmacies and cafes. So it will help you out in almost any situation.

Can this card only be used for purchases in installments?

Not always. You can store your own funds on the Halva card and pay in stores that are not partners of the bank. And it is also cumulative. This means that you do not need to keep several cards for different purposes - just one is enough.

The balance of your own funds on the Halva card is charged at least 6% per annum. This figure can be increased to 7.5% if you make five purchases per month for a total amount of 10 thousand rubles. Moreover, you can pay both with bank money and with your own funds.

Order the Halva card

And is there really no overpayment?

It depends on your payment discipline. If you return the money on time and follow the terms of the contract in all respects, you will not have to pay anything additional.

For late payment you will have to pay a fine. Therefore, realistically assess your ability to return the money to the bank on time. Installment plans, like any other financial instrument, work only in the hands of a responsible person.

How to choose an installment card?

1. Give preference to banks with a large number of partners so that the installment card does not lie as a useless burden.
2. Choose multifunctional cards with favorable conditions, such as interest on the balance or cashback.
3. Pay attention to the nuances: do you have to pay for SMS notifications, is there an option for depositing funds through ATMs of other banks, and so on.
4. Read the contract carefully. The golden rule always applies here too. It is in the contract that you can find all the nuances. Remember: a signature means that you have read the papers and agree with everything.

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