Paying in Cash vs Installment Payments
Paying in Cash vs Installment Payments
You probably choose your method of payment depending on what it is that you are purchasing, how urgent the purchase is, and how much it costs to make it. And even though there is no wrong or right way to pay for any goods or services, there is a preferred way of payment when buying certain things.
So, before you make your decision on what payment method you’ll be following when making your next purchase, make sure to read on to find out the pros and cons of paying in cash and those of installment payments.
Paying in Cash
Paying in cash is self explanatory, you pay in cash, all at once, and that’s it. This type of payment is highly preferred by some people, but is very much avoided at all costs by others. This is all because of the advantages and disadvantages of paying in cash, which are as follows:
Pros of Paying in Cash:
- Financial Freedom: When paying in cash, there is no need to worry about installments coming up, paying any monthly interests or your long-term commitment paying them. The money you get each month is all yours to save and spend.
- Stops you from Overspending: As you save to purchase and pay for a new home, car, furniture, or mobile phone, it stops you from overspending, helps you get a grip over your finances, and stops you from impulsive shopping.
- Cheaper Purchases: When paying in cash all at once, the price of the purchase is much lower than it is if you pay for the same purchase but in installments or through a loan. Plus, when paying in cash, you pay with no interest.
Cons of Paying in Cash:
- Saving is Time Consuming: Saving a great deal of money for a car, or any other pricey purchase, takes a lot of time. Saving can take you years to finally have the needed amount of money to make your purchase. And a lot of the time, the wait is not appealing nor practical for many people.
- Urgent Purchases: Sometimes, you might need to make an urgent purchase that cannot wait. In this case, paying in cash might not always be an option since you might not have enough money to make the payment on time.
- Draining your Savings: Paying a big sum of money in cash all at once can drain your savings and cause you to have no amount of saved money for any health emergencies or any other plans.
Paying in Installments
Paying in installments is a widely known and favored way of payment, especially when it comes to making big purchases such as cars, apartments, devices, home appliances, furniture, plus any mix of these things and more.
Pros of Paying in Installments:
- Practical: Installment payments are carried out through a practical payment plan that the buyer chooses when making their purchase.
This plan divides the entire sum of money that the buyer needs to pay into monthly payments spread over a period of few months, one year or up until 20 years.
The buyer chooses the payment plan that best suits their financial responsibilities, spendings, and needs.
- Easy to Manage: Paying a monthly installment that makes up a small amount of money is much more manageable than paying a big sum of money at once. Monthly installments are easy to manage, maintain, and commit to.
- Easing Urgant Purchases: Urgent purchases are made possible and easy thanks to paying in installments. There’s no need to worry about your savings and whether or not they’re enough for your urgent financial needs as you can pay in installments. Afford whatever you need without breaking the bank with paying in installments.
Cons of Paying in Installments:
- Interest Rates: Paying in installments may come with a price – interest rates. Meaning that your purchase becomes more expensive than it really is because you will be paying interest fees when making your monthly payments.
- Demands Lots of Commitment: Financial commitment when it comes to monthly installments pushes many people from choosing this route of payment.
You may have no problem with paying a regular sum of money each month for the next 3 to 12 months, but that may not be the case when the installments spread over 10, 20 or even 25 years as this can take some of your financial freedom away.
- Impulsive Spending: When the “buy now pay later” option is available, you may be tempted to spend more than you should, and then trap yourself in many monthly payments that are not easy to manage and pay on time.
Monthly Installments with Cashew
Cashew provides you with the most practical payment method that enables you to shop, make all the purchases you need and want, and pay later! To try the buy now pay later option with Cashew payments follow these steps:
- Fill your cart and pay with Cashew.
- Pay over time by choosing Divide or Delay.
- Pay monthly installments that you choose and manage.
- Enjoy the free-interest and secure paying installments with Cashew!