At first glance, the most convenient option for purchasing a product. The very word "installment plan" already implies the most fair conditions in comparison with a loan. As they say, the benefit is obvious: you are with the right product, your wallet has retained its volume and the store has made a sale. But in the rainbow scheme there is another side of commodity-money relations - this is the bank.
The percentage of overpayments is already included in the cost of the goods
Please note that the same product, but offered for purchase in installments, will cost more than if it were sold without the use of bank services. The fact is that the bank enters into an agreement with the store, when buying goods in installments, the store receives the full amount from the bank. The benefit of the financial organization itself is to receive the very interest from the client, which is pre-added to the cost of the product itself.
The store also benefits from the installment plan
As a rule, the goods provided by the store for purchase in installments are sold not only at an inflated price, but also with certain services, whether it is insurance or the purchase by the buyer of any of the services, less often accessories.
Financially literate buyers can easily opt out of purchasing imposed installment terms. In this case, the credit manager, when drawing up a request to the bank, can tick the box that the potential borrower is drunk, after which the bank will not approve the installment plan. Such behavior and actions of a specialist in the issuance of loans and borrowings are not spelled out anywhere, but only this is the "human factor".
If the installment agreement stipulates that the buyer can repay the entire amount to the bank ahead of time, the buyer will be pleasantly surprised by the recalculation in his favor. It's simple: the financial institution will deduct only the period that the buyer used the installment plan service from the interest added to the product.
