Installment Vs. Lumpsum Payment?

 

Who doesn’t love becoming owner of a property and earning lifetime of benefits through the same? It’s a sense of financial security that stay stays with you forever but to attain it, is a whole lot of work!

This requires payment of the said property to acquire its possession. However, that comes in two forms based on the way you choose to pay. A payment can be done two ways listed below:

1.     Lump sum payment

2.     Installments

Lump Sum Payment:

A lump sum payment is the type of payment that is completed in one-go and is not divided into smaller payments. This type of payment usually suits those who are in the position of the expected amount of the relevant asset. However, it has its own fair share of advantages and disadvantages which are mentioned below.

Advantages:

Out of several advantages of lump sum payment the widely appreciated ones are:

1.     Time saving

2.     Convenient 

1.    Time Saving:

A lump sum payment enables to give a single payment and get done with the whole procedure once and for all. The best part about it is that it isn’t divided and dragged for several months making you live in fear of a monthly burden.

2.     Convenient:

If one can easily afford to pay in a single go, he would always find paying a lump sum amount more convenient. This helps you get possession of your asset as soon as possible without waiting for months or years.

Disadvantages:

Coming to the disadvantages of lump sum payment, here are a few of them:

1.      Burden

2.      Sudden commitments

    1.      Burden:

Even if you prefer paying a lump sum amount, it still can be a source of burden for some especially if the amount to be paid is huge.

    2.      Sudden Commitment:

Sometimes even when you have the total amount arranged, you come across another financial commitment that has to be attended first. A sudden accident, health related issue or any other matter of the same sort that requires money to be dealt with, halts your process of purchasing a property/asset in a single go.

Installments:

Installments are another payment method that bound you to pay several small payments that have to be paid within due time. Initially a down payment has to be done which is followed by equal monthly or quarterly installments.

Installments have a lot of advantages and disadvantages of their own. Some of the most common ones are:

Advantages:

Among some really amazing advantages of Installment Method, some of the really hyped ones are:

1.      Less financial burden

2.      Payment as per ease

   Less Financial Burden:

With the help of installment method, one feels fewer burdens in terms of finance. You can easily pay monthly or quarterly installment as per your convenience and affordability. This method allows you to break down a huge amount into easily payable smaller ones. 

Payment as per ease:

Another benefit of this method is that the installments are given keeping your ease in mind. You decide the amount you can easily pay each month for a specific duration. 

Disadvantages:

Disadvantages of installment system should also be considered before taking a final decision. The most frequently occurring issues people have to face while paying installments are:

• Interest 
• Time Consuming Process  

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1.      Interest:

Installments seem to be easy but they certainly demand more than the original price. The concept of interest is implied in this method. One has to pay far more than the original price to be able to completely buy a certain possession. Not only is it inappropriate but also heavy on the pocket.

1.      Time Consuming Process:

There comes a time when the person paying installments seems to get fed up of this monthly hassle. ‘When will this ever end?’ is a question that often crosses his or her mind. The whole process seems to be quite time taking and overly stretched. This is why installments become tiring and require too much effort.

These are the major differences, pros and cons of both Installments and Lump Sum Payment. By thoroughly going through both of these, one can easily make up his mind about which method suits him best.

However, to avoid any confusion regarding such decisions, consult Regency Marketing for upright and honest suggestions about the same. Their fair and reliable policies help you take a decision that is not only convenient but also turns out to be highly profitable in the years to come.