Complete guide: Installment Purchases
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A small payment can hide a high cost over a long term. Compare offers by adding the down payment, all installments and fees, then comparing that total with the cash price of the same product.
Rate mode uses a nominal annual rate divided by 12 and fixed monthly payments on the outstanding balance. It is not an APR or effective annual rate. With a zero rate, the payment is financed principal divided by months. Fees are paid separately and are not financed.
If the store quotes a payment, use quoted-payment mode to find the real total without assuming its financing method. The cash difference includes implicit interest or markups and fees; if negative, it represents savings. Insurance, balloon payments and charges not entered are excluded.
How it works
- 1Financed principal = cash price − down payment; we calculate the payment or use the quoted one.
- 2Total cost = down payment + payment × months + fees; difference = total cost − cash price.
Frequently asked questions
How do I check interest-free installments?
Enter the quoted payment and compare down payment plus installments plus fees with the cash price. Interest-free does not always mean no extra cost.
Is the rate APR?
No, rate mode uses a nominal annual rate with monthly payments and does not calculate APR.
Are fees included in the payment?
No: here they are added to total cost as a separate payment. Only enter fees not already included in the quoted installment.