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Instalment true-cost calculator

Add up everything an instalment plan takes, including the fees charged outside the monthly figure, and turn it into a premium and an annual rate you can compare with a bank.

The offer

What the same item costs paying outright

Optional

One payment, as the seller quotes it

Fees charged on top

This is usually where the cost of a “0% markup” plan lives. Ask what is charged at signing: processing, documentation, insurance, anything that is not part of the monthly figure.

Optional

Optional

This tool has no view on whether a plan is worth taking. It turns the monthly figure into one you can compare with something else, and stops there.

What the plan costs

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Enter the cash price, the monthly instalment and the number of months.

Where a 0% markup plan hides its cost

“Zero percent markup” is a claim about one line of the offer: the instalments add up to the cash price. It is often true, and it is often not the whole bill.

Take a phone at 100,000 on twelve instalments of 8,333. The instalments come to 100,000 exactly, so the claim holds. Then there is a 5,000 processing fee at signing. You have paid 105,000 for something priced at 100,000, and you financed 95,000 rather than 100,000, because 5,000 of your own money went out on day one. That is an effective annual rate somewhere around 10%, on a plan advertised at zero.

So the question to ask is not what the markup is. It is what leaves my hands in total, and what do I get for it.

Two numbers, doing different jobs

The premium is the extra money as a share of the cash price. You can check it on a phone in ten seconds, and it is the right number for deciding whether the convenience is worth it.

The effective annual rate is what the plan would be called if a bank were selling it, and it is always higher than the premium looks. That is not a trick of presentation. You do not owe the whole amount for the whole year: each instalment cuts the balance, so on average only about half the money is outstanding. The same cost spread over half the borrowing is roughly double the rate.

A 14% premium over twelve months works out near 26% a year. Both figures are true and they answer different questions. Compare the annual rate with a bank; compare the premium with how much you mind.

What to ask before you sign

  • What is the cash price at this shop today? Not the list price, not the price online. The one you would pay walking out with it.
  • What is charged at signing? Processing, documentation, insurance, file charges. These are the figures that turn a free plan into a priced one.
  • Is anything charged for paying early? This tool assumes the schedule runs to term. A settlement penalty changes the arithmetic and is worth knowing before rather than after.

What this does not model

Late payment charges, early settlement penalties, and any rate that changes partway through the schedule. It assumes every instalment is the same size and every one is paid on time, which is the plan as it was described to you rather than the plan as it might turn out.

It also has no opinion. Spreading a cost can be the right call even at a rate that looks high, and a low rate is no reason to buy something you were not buying. The tool produces numbers; the decision is not arithmetic.

Questions

The shop says 0% markup. Can it still cost me money?
Yes, and this is the most common case. A plan can have instalments that add up to exactly the cash price and still cost real money, because the processing fee, documentation charge or insurance sits outside the instalment schedule. Nobody calls those markup, and they are charged at signing rather than spread across the months, so they never appear in the monthly figure you are quoted.
Why is the annual rate higher than the premium?
Because you do not owe the whole amount for the whole time. Paying 14% extra over twelve monthly instalments is not borrowing at 14%: each payment reduces the balance, so on average only about half the money is outstanding, and the same cost spread over half the borrowing is roughly double the rate. That is why the annual rate is the figure to compare with a bank and the premium is not.
What counts as the cash price?
What the same item costs if you walk in and pay outright today, at the same shop. Comparing an instalment plan against a lower price somewhere else mixes two questions: whether to buy there, and whether to take the plan. Use the seller's own cash price and the answer is about the plan alone.
Should the fee go in as a fee or inside the instalment?
As a fee, if it is charged at signing, which is how a processing fee usually works. If it has been rolled into the monthly payments instead, it is already inside the instalment figure and needs no separate entry. Either way the arithmetic lands in the right place, as long as it is counted once.
Does this tell me whether the plan is a good deal?
No, and it does not try to. Paying 12% a year to spread a washing machine over a year can be perfectly sound, and paying 4% can be a poor decision if the money was not there. Whether a rate is worth paying depends on what else you would do with the money, which this tool knows nothing about. It shows the numbers so you can make that call yourself.
Why does it sometimes say there is no annualised rate?
Because there genuinely is not one. If the plan costs exactly the cash price there is nothing to annualise, if it costs less it is a discount rather than a cost, and if the down payment and fees already cover the price then nothing is being financed. In each case the tool says which it is rather than printing a dash where a number was expected.
Does it work for currencies other than rupees?
Yes. The arithmetic has no currency in it, and the list at the top only decides how figures are printed. The situation it was built for is common in Pakistan, where a great deal of retail credit on phones and appliances is sold as 0% markup, but nothing about the calculation is specific to one country.
Does anything I type here get sent anywhere?
No. The calculation runs in your browser, in the page you are already looking at. Nothing is uploaded, stored or logged, and closing the tab clears it.

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