With some products you have the option to pay in installments. Also buy on installment. Furniture is a good example of this. If you buy furniture on payment, you actually take out a loan to finance your furniture. With the disadvantage that installment buying often has a much higher interest rate than a personal loan from a bank or credit company. Purchase by installment is therefore not always a smart choice.
Buy furniture on installment
If you buy furniture on payment, you conclude an agreement with the supplier that you pay the total selling price of your sofa or dining table in multiple installments. Because the seller has to wait longer for his money, you pay interest on the outstanding amount. This means that you ultimately not only pay the actual price of the furniture, but also the interest.
Installed furniture – Advantages
- You immediately have the furniture, even though you don’t have the money for it now
- In contrast to a rental purchase, you are the direct owner of the furniture
- The purchase price is divided over periods. You do not have to pay this in one go
Buying installment furniture – Cons
- By buying on installment, the total price is higher than the original purchase price
- It is possible that your furniture is already broken while the payment term is still running. You then pay for a product that can actually leave
- The interest rate is generally very high
Pay for furniture in installments or a personal loan?
Are you really ready for new furniture, but have you simply not saved enough to buy the new furniture at the moment? Then a personal loan is also a way to purchase it. With a personal loan you receive the loan amount in one go to your account. You then repay this amount in fixed monthly installments. Because the interest you pay is also fixed, you know in advance exactly how much you will ultimately have lost and when the loan was paid off. The advantage of a personal loan to buy furniture is that the interest is lower than with an installment purchase. This means that you end up spending less money.