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"Interest-free" installments or a cash discount?

Find out whether paying in installments or taking the cash discount is the better deal.

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Example value. Paraguay: 1.7% in September 2026.

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Example value. For reference, the average bank CDA rate in Paraguay for terms over 365 days was 9.95% (BCP, June 2026).

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Educational estimate based on the data you enter. It doesn't include taxes or future changes. It's not an offer or personalized advice.

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How it's calculated

An "interest-free" installment is almost never free: the seller already charges for it inside the price. To find out which is better, we bring all the payments to today's money using a discount rate: the higher of inflation and what your money could earn.

Value of the payments today = Σ payment / (1 + m)^k, where m is the monthly rate. If that value is lower than the cash price, paying in installments is better; if it's higher, cash is better.

We also calculate the hidden cost: the monthly rate that makes the payments equal to the cash price. It's what you're really charged for financing.

Watch out for this

  • If paying cash would leave you without an emergency fund, don't do it even if the numbers favor it.
  • Check that the cash price is real: sometimes the "discount" is built by raising the installment price.
  • If you're charged a card fee or a fee per installment, add it to the amount of each payment.

Frequently asked questions

Questions about this calculator

Still have a question? Write to us

Why use the higher of inflation and return?

Because money you don't spend today at least keeps its purchasing power (inflation) or earns something in an account. We use the higher of the two so we're not too optimistic about installments.

What if the cash discount is small?

If the hidden cost is lower than what your money would earn, installments win. If not, cash saves you more.

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