Six Things to Know About Installment Payment Plans in SG

Whether you’re a local or a foreigner, living in Singapore is not cheap. This is common knowledge amongst almost everyone, and with rising costs of living, it is more relevant to the average Singaporean than ever. But if it is so expensive to live in Singapore, how do people still make significant purchases for their homes and lifestyles on the daily?

One popular method many Singaporeans turn to for acquiring higher-ticket items, from the latest electronics to essential home appliances and stylish furniture, is a credit card installment payment plan. The main draw of this is being able to break down a large sum of money into smaller, more manageable monthly payments—an undeniably attractive proposition especially when advertised with “0% interest” offers.

However, while these plans can appear incredibly useful for budgeting, they often come with subtle nuances and hidden considerations that aren't immediately apparent.

Before pulling the trigger on any installment plan, it’s crucial to understand the full picture so that you’re fully educated on what you’re committing yourself to. What may seem like a straightforward deal on the surface could impact your future purchasing power and financial standing.

This article is written as your essential guide to credit card installment plans, shedding light on their less-talked about aspects so you can understand how these plans truly operate. Once you understand their common misconceptions and potential pitfalls, you’ll have the proper knowledge and tools to make informed financial decisions. Plus, if you’re interested in exploring transparent and flexible alternatives to installment plans, we’ll cover how Easeebuy can help you afford quality purchases without the complexities associated with traditional financing. 

1. “0% Interest” Doesn’t Always Mean Zero Fees

The idea of a credit card with interest-free installment is incredibly appealing to most consumers as it seems to promise you a way to spread out payments without incurring additional costs. Think about it: don’t you want to be able to afford your dream Samsung TV, a new iPhone, or the latest Asus gaming monitor over several regular, easy payments? Without any additional interest?

However, it’s a common misconception that “0% interest” automatically equates to “zero (additional) fees”. In reality, while you might not be charged interest on the outstanding balance, many financial institutions in Singapore typically apply various processing or administrative fees of around 2-5% of the purchase amount. These charges are often deducted upfront or spread across the first few installments, and they're rarely highlighted as prominently as the original “0% interest” offer. 

While this percentage seems small, the amount can quickly add up for big-ticket purchases, effectively increasing the total cost of your item. For instance, if you purchase a S$2,000 washing machine on a 0% interest installment payment plan but incur a 3% processing fee, you're effectively paying an extra S$60. Now just imagine how much that 3% fee would be if you’re buying something even bigger like a car where the purchase price runs into the tens or hundreds of thousands.

The Easeebuy Advantage

This lack of transparency is what Easeebuy is trying to combat. Our commitment to transparency means there are no hidden fees or administrative charges with our flexible hire purchase plans: the monthly pricing you see is the price you pay and what you see is what you get.

It’s clear, straightforward, and predictable, enabling you to budget for purchases (big and small) without unexpected costs. 

2. Your Credit Limit Shrinks Immediately

When you opt for a credit card installment plan in Singapore there's a crucial detail that often goes unnoticed: your available credit limit is typically reduced by the full amount of the purchase at the point of transaction, not just by the monthly installment. This can have significant implications for your financial flexibility.

Let’s say you have a credit card with a S$5,000 limit, and you use it to finance a S$2,500 television on a 24-month installment schedule. Even though you’ll only be paying S$104.17 per month (and this does not include any additional fees), your credit card’s available limit immediately drops to S$2,500. This is because the bank has essentially “reserved” the full S$2,500 from your credit line for that specific purchase.

This immediate deduction means that your ability to make other large purchases or handle unexpected expenses using that credit card is significantly curtailed. It can also impact your credit utilisation ratio—a key factor in your credit score—potentially affecting your access to future credit or loans. For those who rely on their credit limit for day-to-day spending or emergencies, this can be a significant hidden drawback.

The Easeebuy Advantage

Easeebuy’s hire purchase model eliminates this concern entirely. We focus on providing a clear path to ownership, free from the entanglements of your personal credit limits. Because our solutions require no credit card involvement, your existing credit lines with banks remain completely untouched. This means your credit availability is preserved, and your credit score is unaffected by any purchases made through Easeebuy.

Our approach to financial inclusion ensures that you can acquire the products you need without compromising your existing financial standing or limiting your access to future credit. We believe that everyone should have the opportunity to make quality purchases without the complexities or restrictions imposed by traditional credit systems. Find out more in our About Us page.

3. Early Repayment Could Cost You

For many consumers, the idea of paying off a financial commitment earlier than planned seems like a smart way to clear obligations faster and potentially save money. However, this isn't always the case when you sign up for a credit card installment plan in Singapore.

Credit card providers often impose an early termination penalty when you decide to settle your installment payment plan ahead of schedule. This penalty can range from a fixed fee to a percentage of the remaining outstanding amount, and may be a clause buried deep within the terms and conditions. It is meant to compensate the bank for the interest or fees they would have collected over the full duration of the plan.

Many consumers, eager to free themselves from monthly payments, don't realise these hidden costs until they contact their bank to request an early settlement. It can be a surprising revelation if you’re trying to be financially prudent, as your attempt to save money or simplify your finances ends up costing you more. 

The Easeebuy Advantage

Easeebuy’s approach is fundamentally different and designed with maximum customer flexibility in mind. We understand that financial situations can change, and you might wish to complete your payments earlier. With our flexible plans that have no complex penalties for early repayment, you can have a straightforward and stress-free alternative to traditional financing. 

We believe that empowering our customers with clear terms and the freedom to manage their repayments without punitive fees is essential to a customer-friendly experience. This allows you peace of mind as you can remain in full control of your financial journey.

4. You Might Not Earn Any Rewards

One of the significant attractions of using credit cards for purchases in Singapore is the promise of rewards, be it cashback, loyalty points, or air miles. These perks can make high-value transactions more appealing as you effectively get something back for your spending. However, when it comes to credit card installment plans, especially those advertised as zero interest or interest-free options, this benefit often vanishes.

It's a common but overlooked detail that many installment purchases, despite being transacted through your credit card, do not qualify for your card's reward programmes. This means that the substantial sum you’ve committed to, perhaps for a new refrigerator or a state-of-the-art laptop, might not contribute to the cashback you're expecting, the points you're accumulating for a voucher, or the miles you’re saving for your next holiday.

For consumers who want to strategically use their credit cards to maximise rewards, this is a significant disappointment and missed opportunity. While the convenience of spreading payments is there, the additional perk that often justifies credit card use is absent.

The Easeebuy Advantage

Easeebuy shifts the focus from chasing elusive points or miles to delivering tangible, upfront financial benefits. Instead of being preoccupied with whether your purchase will earn rewards, you gain immediate affordability and greater control over your finances with our hire purchase solutions.

We provide a straightforward path to ownership with clear, manageable monthly payments, freeing you from worrying about reward exclusions or minimum spend requirements. With Easeebuy, the reward is the peace of mind that comes from owning the products you need, made truly affordable.

5. Not Everyone Qualifies for Credit Card Plans

While credit card installment plans seem widely available, the reality is that eligibility for these options is often pretty stringent, and you may be excluded from them if you’re a lower earner.

Banks and financial institutions typically have strict criteria that potential applicants must meet to qualify for credit cards, and by extension, for their associated installment facilities. These requirements often include a minimum income threshold, age restrictions, and a robust credit history and healthy credit score. If you’re an individual with limited credit history, new to the workforce, or even someone who’s faced past financial challenges, you might find yourself ineligible for these plans.

This creates a significant barrier for many hardworking individuals in Singapore who are in genuine need of flexible payment options but do not meet the traditional banking criteria. Consequently, despite the visible advertising, a large proportion of consumers are unable to access the attractive 0% installment plans they desire.

The Easeebuy Advantage

Easeebuy bridges this gap by championing true financial inclusion. Our services are designed to be accessible to a broader audience, making quality purchases attainable for more people.

We are open to all Singapore Citizens and Permanent Residents aged 21 to 65, with a straightforward minimum monthly income requirement of just S$1,800. Critically, no credit score is required to apply for our hire purchase plans.

This inclusive approach ensures that individuals from all educational and working backgrounds and varying financial histories can access the products they need, without being hindered by traditional credit assessments. Our application process can even be initiated directly on your mobile device for further ease of access:

Download Easeebuy on Apple App Store

Download Easeebuy on Google Play Store

We encourage you to explore our user-friendly applications. We believe that everyone deserves the opportunity to make quality purchases without facing unnecessary hurdles.

6. There’s a Simpler, More Transparent Alternative

Having explored the complexities and limitations often associated with traditional credit card installment plans, you can now understand that the answer to “how does a 0 installment credit card plan work” is not as straightforward as you’d think.

This is where Easeebuy’s hire purchase model shines as a truly innovative and customer-centric alternative for big-ticket purchase financing in Singapore. To better understand the full process from application to ownership, we’ve broken down how hire purchase agreements work so you can sign up for Easeebuy with full discretion.

The Easeebuy Advantage

Easeebuy was specifically designed to circumvent the drawbacks of conventional financing, offering a path to ownership that is both clear and convenient:

• No hidden fees, the price you see is the price you pay
• No impact on your credit limit
• No early repayment penalties, for your convenience!
• No rewards confusion
• Broad and inclusive eligibility requirements
• No credit card needed

All of these immediately liberate you from credit limit concerns, credit score dependencies, and the intricate terms often found in bank policies. Instead, Easeebuy offers clear, fixed monthly payments tailored to your budget, with payment periods ranging from 6 to 24 months. This structure provides predictable financial planning with no additional fees or interest tacked on, allowing you to comfortably integrate purchases into your monthly expenses without surprises.

To make this even easier, we’re partnered with Singpass! This enables Easeebuy users to instantly and securely retrieve their personal information, ensuring a faster, hassle-free application process. Our Singpass partnership also reflects our dedication to reliability and compliance as we are required to meet strict verification and approval standards.

Whether you’re looking to buy a fridge on installments, sign up for an iphone installment plan, or buy an aircon through monthly installments, Easeebuy is here to empower your financial future. 

Hire Purchase: A Truly Interest-Free Alternative to Credit Card Installment Plan

Credit card installment payment plans are undoubtedly useful financial tools for managing large purchases in Singapore, offering the benefit of spreading costs over time. 

However, as we’ve explored, not all plans are created equal, and many “0% interest” options come with less-than-obvious terms that can affect your finances, credit, and overall peace of mind. From hidden processing fees and credit limit reductions to early repayment penalties and the absence of rewards, it’s clear that a deeper understanding of how these plans work is necessary to make truly informed decisions.

If you’re looking for a genuine, transparent, and inclusive alternative to interest-free installment credit card plans, why not try Easeebuy’s hire purchase model?

Easeebuy’s approach is specifically designed to address the common pain points associated with conventional financing. We believe in providing a clear, stress-free path to owning the quality products and services you need, without requiring a credit card or subjecting you to complex banking terms. Our focus is on empowering Singaporeans with flexible, manageable monthly payments, ensuring financial breathing room for everyone eligible. 

Don't let high upfront costs hold you back. Take the first step towards smarter, more flexible purchasing today.

Apply now and unlock a world of affordability with Easeebuy.

Download Easeebuy on Apple App Store

Download Easeebuy on Google Play Store

For immediate answers to common questions, please visit our FAQ page.