Installment and loan are two different concepts. A simple understanding of a loan is to borrow money with interest. Loan is a form of credit activity in which banks or other financial institutions lend monetary funds at a certain interest rate and must return them.

Loans in a broad sense refer to loans, discounts, overdrafts and other borrowing funds. Installment refers to the repayment method, which is divided into three installments, six installments, 12 installment, 24 installments, etc. Besides installment, there are other repayment methods for loans, such as giving priority to interest, repaying loans with loans, matching principal and interest, average capital and so on. Loan refers to the whole process, including the process of borrowing money, withdrawing money and paying back the money, while staging only refers to how to pay back the money.

pay by Installments

Installment payment was developed after the Second World War. At first, it was limited to buying ordinary daily goods or services. Later, with the rapid development of productivity, the scale of industrial and agricultural production is expanding day by day, and the required expenses are increasing day by day. In addition, with the development of bank credit, the field of installment payment has expanded to enterprises that buy large machinery and equipment and raw materials.

With the improvement of China's financial services and the change of people's consumption habits, installment payment, which is popular abroad, has been introduced to China and quickly recognized by domestic consumers. It is usually young people who have poor ability to pay but have consumption needs who spend by stages. The products it consumes are usually laptops, mobile phones and digital products.

Installment payments are usually provided by banks and installment suppliers. Banks provide consumers with personal consumption loans equivalent to the amount of goods they buy, and consumers use the loans to pay their suppliers, who provide guarantees for consumers and bear irrevocable joint and several liabilities. Young people who spend by installment are often called "installment families".

Installment payment is actually a loan provided by the seller to the buyer. The seller is the creditor and the buyer is the debtor. The buyer can get the goods or services he needs only by paying a small amount of money, but because the interest is included in the future installment, the amount paid for the same goods or services by installment is more than the amount paid in one lump sum.