We always advocate making smart financial decisions and spending within your means.
But if you’re sure that you can afford that big ticket item, you might want to consider a 0% interest instalment plan to avoid having to pay a large amount upfront. That way, you can free up cash for urgent use.
Note that although they all claim to be 0% interest, there may be costs such as processing fees.
How do 0% interest instalment plans work?
The two main types of instalment plans in Singapore are those offered by companies similar to tech start-ups, and those offered by banks to their cardholders.
The first type of plan (including those by Hoolah, Rely and Atome) typically does not charge interest or processing fees. You can, however, only use these plans when shopping at partner merchants. They make money by charging their partner merchants transaction fees, rather than customers.
The second type, offered by banks to their cardholders, can usually be used for all purchases. These plans mostly advertise themselves as interest-free but actually charge one-time processing fees equivalent to a percentage of your transaction. They also charge an early payment fee if you try to pay up earlier or cancel the credit card with which you paid.