Why Singaporeans Prefer Using Instalment Payment Plans

The financial landscape for consumers in Singapore is continually evolving, with a noticeable pivot away from traditional lump-sum payments. Consumers are increasingly looking for greater flexibility, recognising the benefits of breaking down large expenses into smaller, more digestible portions rather than enduring immediate, significant costs.

This shift clearly indicates a growing preference for financial solutions that align more closely with contemporary budgeting practices and personal financial goals, ultimately offering Singaporeans greater control over their spending. We’ll delve into the various instalment methods available and their implications for consumers like you.

Understanding Instalment Plans in Singapore

Instalment plans represent a widely adopted financial mechanism allowing consumers to pay for purchases over an extended period rather than upfront. While numerous variations exist, credit card instalment plans are arguably the most common in Singapore. These arrangements typically involve what is essentially a credit card holder utilising their existing credit limit to finance a purchase. This is how the total cost is then divided into fixed monthly repayments over a predetermined tenure. This setup enables the immediate acquisition of goods while deferring the full cost, allowing them to work as a convenient bridge between desire and affordability.

In Singapore, banks frequently offer these credit card instalment plans with diverse interest models. Some may present attractive 0% interest for initial promotional periods, while others incorporate either a flat interest rate or an effective interest rate (EIR) calculated on the outstanding balance. Eligibility for such plans remains largely contingent on the cardholder's creditworthiness, income, and available credit limit. 

While repayment structures are generally rigid, many people still opt for these plans due to their immediate convenience and widespread availability.

Limitations of Credit Card Instalment Plans

High Eligibility Barriers

A robust credit score is a fundamental prerequisite, as financial institutions meticulously assess an applicant's repayment history and financial standing. Banks typically consult the Credit Bureau Singapore (CBS) to retrieve this score, which usually ranges from 1,000 to 2,000. A score between 1,844 and 2,000 is generally considered good, indicating a lower likelihood of default and signalling to lenders that you’re a reliable borrower. This meticulous check means that those with limited credit history or past financial missteps may face immediate rejection.

Furthermore, a substantial yearly income barrier frequently applies, setting a minimum threshold that can exclude a considerable segment of the population. For most credit cards in Singapore, this often translates to a minimum annual income of S$30,000 for Singaporeans and Permanent Residents (PRs). This requirement disproportionately affects individuals in entry-level positions, those with non-traditional income streams, or even those temporarily out of employment, effectively preventing them from qualifying for these seemingly convenient payment options.

Hidden Costs

While seemingly straightforward, credit card instalment plans can conceal various additional expenses. Beyond the advertised interest rates, consumers may encounter processing fees, administrative charges, or even early settlement penalties. The true interest charged can sometimes be higher than initially perceived, especially when factoring in the effective interest rate, which often exceeds the flat rate. Furthermore, some plans impose a minimum lock-in period, limiting flexibility and potentially incurring additional charges if the consumer wishes to settle the outstanding balance prematurely.

Inaccessibility

A significant number of Singaporeans may find credit card instalment plans largely inaccessible, especially those without credit cards – a demographic that includes young adults, new entrants to the workforce, or individuals who prefer to avoid credit debt. Without a traditional credit card, the primary avenue for securing widely available instalment options remains closed, limiting their purchasing power and forcing them to resort to lump-sum payments for essential items, which can be financially burdensome.

Alternatives Gaining Ground in Singapore

The contemporary consumer in Singapore is actively seeking financial solutions that go beyond the limitations of conventional models. A notable shift is occurring, with individuals increasingly demanding transparent, flexible, and inclusive solutions that align with their diverse financial situations. This evolving preference has paved the way for the emergence of various digital payment alternatives that offer innovative approaches to managing expenses. Among these, Buy Now, Pay Later (BNPL) services have rapidly gained traction, providing consumers with immediate purchasing power combined with structured, manageable repayment schedules, often without the need for a traditional credit card.

Why Instalment Payments Appeal to Singaporeans

The growing appeal of instalment payments among Singaporeans is deeply rooted in a strong preference for debt-free living and flexible payment structures. Such payment structures, when managed responsibly, allow individuals to acquire necessary items while maintaining manageable financial commitments. This is particularly helpful with large or necessary purchases, such as electronics or home appliances, as it breaks down significant costs into more affordable portions.

Furthermore, there's an increasing trust in flexible payment tools and platforms that offer transparent terms and empower consumers to budget effectively, aligning with a desire for prudent financial management.

Easeebuy’s Hire Purchase: Instalment Plans Without a Credit Card

Easeebuy introduces an alternative financial solution in Singapore, specialising in hire-purchase instalments for a wide array of consumer products and services. This model is specifically designed to make quality purchases more affordable and manageable, providing a vital option besides the traditional payment methods. Our hire-purchase framework offers a practical and stress-free pathway for individuals who may feel financially overstretched to meet their essential needs without immediate full payment.

With Easeebuy, you gain access to significant benefits: no credit card is needed when applying, simplifying accessibility for a broad demographic. All plans feature fixed monthly payments, ensuring predictability and ease in budgeting. Moreover, our seamless Singpass integration facilitates a rapid, hassle-free approval process by securely retrieving necessary personal information. We pride ourselves on being a regulated and trustworthy option, offering long-term clarity and compliance to ensure your peace of mind.

Credit Card vs Easeebuy: A Quick Comparison

Understanding the differences between traditional credit card instalments and Easeebuy's hire purchase model can help you make an informed decision. Here’s a quick overview:

How to Start an Instalment Plan with Easeebuy

Getting started with an instalment plan at Easeebuy is easy and transparent – we've made sure it's a secure and user-friendly experience for everyone!

1. Browse Product: Begin by selecting the desired product or service from Easeebuy’s wide array of offerings.
2. Apply via Singpass: Initiate your application with ease through Singpass, facilitating rapid data retrieval and verification.
3. Choose Plan: Select an instalment plan that best suits your budget, with flexible repayment tenures ranging from 6 to 24 months.
4. Make Monthly Payments: Upon approval, enjoy your purchase and conveniently manage your finances through fixed, affordable monthly repayments.

Your Path to Accessible Purchases

Easeebuy is here to offer a fresh and inclusive way to get the things you need in Singapore, without needing a credit card. Our unique instalment plans help you manage your finances smarter, freeing you from the usual credit system hassles. So, go ahead and confidently take that first step towards making quality purchases more affordable and manageable today!