When purchasing goods (from household appliances and electronics to clothing and shoes), different payment options are offered — including installment plans and loans. The essence of both methods is simple: you borrow the required amount from the bank and repay it in parts over a set period. But what exactly distinguishes an installment plan from a loan?
Simply put, the absence of overpayment is the key difference between an installment plan and a loan.
An installment plan is a payment by parts. The total amount is divided into equal payments. In a loan, the situation is similar, but not identical. The amount is also divided into equal parts, but each payment accrues interest. The borrower must repay both the principal and the interest to the bank.
Many loan products (such as credit cards) offer a grace period during which minimal interest is charged. If repaid within this period, the overpayment will be small. Early repayment is available for most loans.
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Terms are another distinction between a loan and an installment plan. Installment plans are issued for a short period — usually from 2 to 12 months (rarely up to 24 months). Consumer loans are provided for a longer term — typically up to 5 years. Due to the extended term, monthly loan payments are lower, which reduces the burden on the household budget. In many cases, this factor is decisive.
Installment plans are issued for the purchase of a specific product. Consumer loan programs are often non-targeted. The client does not need to specify how the borrowed funds will be spent. This could be buying furniture, home renovation, travel, or, for example, education.
Installment plans are available to almost any buyer. Obtaining a loan is more difficult: the bank needs to verify the borrower's solvency, assess their credit history, and income level. However, even in this case, the client usually needs a minimum number of documents: consumer loans are often issued without proof of income, collateral, or guarantors.
What else is different between a loan and an installment plan? Installment plans can be offered by the store itself or by a bank. Loans are issued only by banking institutions. However, bank loans can often be arranged directly in the store: a specialist submits an online application and waits for a decision together with the client. If approved, the bank transfers the funds to the seller, and the client repays the debt in monthly payments.
When a client takes out an installment plan, they do not receive the money. The funds are transferred to the seller’s account, and the client receives a contract and a payment schedule.
A loan can be disbursed in several ways: to the client’s bank account, to a card, or in cash.
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A simpler way to obtain an installment plan or loan is to apply for a credit card or an installment card. This can usually be done online via the bank’s mobile app, without visiting a bank branch.
There are 2-in-1 products — for example, the #картакарта from Bank CenterCredit. It is a credit card with the highest limit in Kazakhstan: up to 7 million tenge. The card can be used worldwide for any purchases — from groceries to household appliances and even cars. Its benefits include free service, up to 10% cashback on favorite categories, up to 30% at partner stores, and a grace period until the 25th day of the month following the purchase (up to 55 days). The card can be switched to installment mode via the bcc.kz app. The user can choose 3, 6, or 12-month installments without interest or fees. The #картакарта is issued via the bcc.kz app or by submitting an application on the website.
Bank CenterCredit clients can also use the bcc smart service for installment purchases. The buyer scans a QR code and receives approval from the bank. With bcc smart, you can purchase goods from 20,000 to 3 million tenge. The installment period can be up to two years.
Installment plans and loans are convenient tools for purchases when the client does not have the full amount available. An installment plan does not involve overpayment but offers a short repayment period, resulting in higher monthly payments. A loan is more suitable for large purchases: due to the longer term, monthly payments are smaller. In addition to standard programs, you can use a credit card, installment card, or QR-based installment services. They speed up the purchase process and make it more comfortable and beneficial.