There are some places, such as some shops and online companies as well as insurers that will offer the option of paying for goods in instalments. This is something which might seem like a fun thing to do but there are draw backs as well. It is a good idea to consider both the advantages and the disadvantages so that you can decide whether you feel that it is a good idea for you to go ahead with.
Advantages of Paying in Instalments
- If you pay for goods in instalments it means that you will be able to afford them more quickly. Often things that we want to buy cost too much for us to pay for immediately. If this is the case with the items that you want to buy, then you could get them quickly and then pay for them over a series of months or years.
- You will not have to bother about saving up for the item and delay buying it. If we have to save up, we will have to cut down out spending elsewhere and make sure that we put some by until we have enough to buy it. This can be tiresome and take a long time.
- We may alternatively borrow from elsewhere. This can be a hassle to set up and we may need to have credit checks and things like this in order to get this sorted out and it could take a long time. Setting up instalment payments is often much easier to do and therefore a more attractive proposition.
Disadvantages of Paying in Instalments
- If you pay in instalments you will normally have to pay more for the item. This will mean that although you get the item sooner you will have a price to pay for that. You will have to decide whether you think that it is worth paying this extra money in order to get the items sooner or whether you would rather save that money, pay less for the item and just wait to get it.
- Saving up for the item can not only save money but give you the opportunity to think about how much you want it. You may find that by the time you have saved up, you decide that you no longer want it any more. IT might be that there is a better item available on the market that you want instead or that you feel you have managed this long without it so you can manage for longer.
- Borrowing from elsewhere might be cheaper. It is good to compare the prices of the two types of borrowing so that you can think about whether it is better to apply to someone else to borrow the money. It may take a little longer but consider whether you are willing to wait that time so that you can spend less in the long run. It could make a considerable difference.
- You may find that paying in instalments is no dearer than buying the item right away from a specific retailer. However, be wary of this because they might incorporate the cost of the loan into the item price and you might be able to buy exactly the same thing cheaper elsewhere.
- Be careful that you are not tempted to buy the item just because it has the option of paying in instalments. Think about whether you really need it and whether it offers you good value for money. Imagine if it was not available like this whether you would be willing to buy it still and whether it is the instalment deal that is swaying your decision.