Month: April 2019

What is installment loan and how it works

by admin

Many citizens are interested in the question of what is installment, because often large stores offer this service to all their customers. From the outside it seems that this is not the same thing as taking goods on credit. But here are some features of the installment plan and how attractive it is for customers, you can find out if you read this article.

Now many large stores offer an installment plan for their customers. She is of two kinds. The first is the “advertising ploy”, which in reality is a bank loan to buy products in the store. But the second type of loan is rarely encountered in practice, and it represents a deferment of the payment schedule for a certain period agreed between the parties.

What is the difference installment from the loan?

What is the difference installment from the loan?

Often installments are offered by stores that sell their products to customers. It is important to understand that a loan is the amount of funds that customers are entitled to take at any bank branch for a fixed term and at a fixed monthly interest. But installment is a way to purchase products, which you need to pay not immediately in full, but in small parts specified in the contract. In addition, the agreement does not provide for items that stipulate the payment by the clients of a commission for the use of funds. After all, it is already included in the price of products. It turns out that the main difference between credit and installments is the percentage that customers need to pay along with the debt.

You can clearly see that payment of goods in installments does not have any interest. But in fact, they are hidden in the price of products or act as a percentage of the risks that the seller bears when the buyer does not pay for the goods within the agreed period. Often this percentage becomes no more than 3% of the price of the purchased product.

For this reason, many unscrupulous sellers hide interest by increasing the price of goods purchased. Therefore, one might think that such loans are really issued without paying interest. Such deception is often resorted to by large stores. Despite this, it should be understood that the installment plan is more profitable than obtaining a consumer loan. These interest rates are invisible, so buyers think that installments are the best way to quickly buy a selected product.

It is important to understand that loans for the purchase of goods are processed only in the shop where the buyer wanted to make a deal. Therefore, the main difference between a loan and an installment plan is that there is no intermediary between the parties in the form of a bank. Operations are carried out directly between the buyer and the seller.

What is important to know before registration?

What is important to know before registration?

 

Installment is not the prerogative of banks, as it is an effective weapon for companies in the struggle between competing stores. Therefore, it is only for them to decide whether they are ready to give a loan to their clients or not. Stores themselves expose interest rate. But many companies do not provide it. In the event that percentages are available, they are so small that they are only enough to pay off inflation.

It is important to know that if customers do not pay even one installment, then in this case the store has the right to take back its products. Customers must strictly adhere to the repayment schedule. Since the stores go to customers on concessions, and they also do not need to let down. In fact, the purchased item passes into the possession of the client only after he fully redeems it.

List of documents provided and the content of the contract

List of documents provided and the content of the contract

 

For registration of products in installments between customers and the store is a loan agreement that contains this information:

  1. Personal information about the two sides of the transaction.
  2. Contact details of the buyer and seller.
  3. Obligations of the parties.
  4. The price of the goods.
  5. Dates and amounts of payments to be returned.
  6. Responsibility of the parties.
  7. Signatures

To get the installments, customers are required to provide much less paperwork than banks require to issue a loan. Therefore, many are interested in what documents are needed for such a procedure. Although each seller and puts forward their significant requirements for their customers, but in most cases it is enough to conclude a contract with only a single passport.

Sometimes at registration you may need other documents that confirm the identity of the client, such as a driver's license. There are stores that want to make sure that the customer is working and has a steady income. And sometimes some sellers are interested in the marital status of the client and the composition of his family.

Instruction

 

Purchase installments liked the product in the store, you can use this instruction:

  1. The advantages of obtaining installment plans for products are very obvious. Customers need to choose a product, pay the agreed percentage, which is within 30% of the price. After payment, customers receive a check, with the help of which the contract is made. On the basis of this agreement, the buyers will have to deposit the agreed amount of money to the store cashier during the stipulated time.
  2. To purchase goods using installments, customers must have a passport of a Russian citizen and another document confirming the identity of the client. In this case, buyers do not need to bring an income statement, as many banks require when making a loan. Customers do not need to confirm personal work experience. Therefore, it is quite convenient. After all, you can save time and money.
  3. The installment contract is made in 2 copies for the buyer and seller. This agreement specifies all the conditions of the store, the amount, loan repayment terms, details and telephone numbers for communication.
  4. The interest for using the provided installments may be completely absent or be very low (not more than 10%). Clients are obliged to deposit the necessary amount of funds to the account specified in the contract within the agreed period. Also, buyers can prematurely repay the contract, because the stores do not interfere with this.
  5. When customers fully repay the amount for the goods, the contract is canceled and the buyer is issued a receipt, which confirms the full payment.

It is important to know that if customers do not comply with the payment deadlines, the seller may file a claim with the court in order to ask for the return of the goods or pay the arrears.

The concept of "installment" has such features

 

Features installment are as follows:

  1. Often in installments sold a series of expensive goods that not many can afford for cash.
  2. The price of products is set by the personal request of the seller. In this case, it can be much higher than the competition and include the risks of the store. But the real price and the one that is offered in installments, do not differ among themselves.
  3. Often shops limit the term and number of payments. It says about a loan for a period of 1-6 months. In addition, they can be provided for up to two years.
  4. In almost all cases, a down payment is provided. It is not less than 30% of the value of the goods.

Here is the difference installment from purchases of goods with the help of a loan.

How old can I make an installment plan?

How old can I make an installment plan?

 

Every citizen of Russia who has reached the age of 23 years can apply for a loan for the purchase of any goods. After all, it is citizens of this age who already have the main job and a regular income, with the help of which it will be possible to pay the debt. But for citizens over the age of 70, stores may be denied services.

The main requirement for working clients is that they have a permanent residence and residence permit. Shops often provide deferred payments for goods to citizens who have a stable salary. As a rule, the size of their income does not matter much.

In that case, if taking the goods, buyers can not get a loan due to the fact that they do not meet the specified requirements of the seller, they can still arrange this service if they themselves provide collateral or guarantors. These services are rare, but the practice confirms the fact that they really allow reducing the risks of the lender.
At the end of the article it can be noted that installments without interest are much more profitable for customers, since buyers do not need to pay interest for such a service. It is important to pay attention to the cost of production - is it large, and to the presence of other obligatory payments, such as insurance.