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Buy now – pay later!

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You want a new laptop, a jacket or a new couch? When you buy an installment plan, you can take the goods home there and then, but you do not have to pay the full price right away. You pay the rest later, in installments. It sounds great. But is it really?
What an installment purchase really costs

Five questions to ask before making an instalment

Long payment terms may result in your having to pay for the purchased article even when you no longer have it. That can be really annoying when it is clothes or a mobile you bought.
Paying there and then is always cheaper. So save the extra cost that comes with an instalment purchase and buy only when you have saved enough money for the item you want.
Monthly payments may quickly get out of hand and overburden your budget. It’s wise to never have more than two instalment plans running at the same time.
Be careful! Interest and fees will be payable when you buy on an instalment plan. There is no such thing as “zero interest & no cost”. Always ask for the effective interest rate per year. Only this will show you how much interest you really have to pay. Usually only the low monthly instalment is mentioned, but the total amount that you have to pay is much more important. Don't forget instalment payments are among the most expensive forms of credit. The Chamber of Labour's bank calculator shows you where the cheapest loans are available
If you get behind with your payments, it may become a costly matter. It’s best to discuss this contingency with the seller before it happens.


And if you are no longer able to pay your debts or instalments, contact the Chamber of Labour or debt counseling.
Buy now – pay later!

What Dr. Dr. Money says

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