Buy now, pay later and payday loans

"Pay in parts" (buy now, pay later) can be genuinely free or quietly expensive, and one comparison tells them apart: the total you pay in installments against the price for paying today.

The washing machine was 6 × 1,250 = 7,500 either way — the same price, so the shop (not you) covered the months; a free loan. The laptop is different: 10 × 1,900 = 19,000 in parts against 16,500 at once, so paying in parts cost 19,000 − 16,500 = 2,500 UAH, about 15.15% of the price. Seen as a 10-month loan of 16,500, that's a real annual cost of roughly 36.9%.

The "0%" on the tag described only the interest line; the raised price did the charging. Always put the installment total next to today's price before you decide.

A "0% installment" label refers to the interest line only, and a seller can set the price however they like. So a plan can honestly say 0% interest while the price in parts is higher than the price for paying today, or while a monthly fee is added on top. Zero in one line doesn't make the whole offer free.

The laptop proved it: 0% interest, yet 19,000 in parts against 16,500 at once. The 2,500 difference is a real cost, just moved out of the "interest" box and into the "price" box.

So never trust the rate label by itself. Compare the total you'll pay (every payment and fee) with today's price. If they're equal and there are no fees, it's a free loan; if the total is higher, that difference is the price of paying in parts, whatever the tag says.

"Instant installments" often charge a monthly fee on the full price, not on the shrinking balance — the same trick as a "0%" loan with a service fee. The fee doesn't fall as you repay, so you keep paying on money you've already returned.

A 12,000 phone over 10 months with a 1.9% monthly fee costs 12,000 / 10 + 0.019 × 12,000 = 1,200 + 228 = 1,428 a month. Over ten months that's 14,280, so the installment's cost is 14,280 − 12,000 = 2,280 UAH. Because the 228 fee is charged on 12,000 even in the final month (when only 1,200 is owed), the real annual cost is about 47.5% — higher than Sam's credit card.

"1.9% a month" sounds tiny, which is the point. Turn it into the total paid and into a yearly rate, and the true size shows.

Microloans (payday loans) advertise a rate per day, which makes a huge yearly cost look small. As of 2026, Ukrainian law caps the daily rate on consumer loans at 1% of the amount with all costs included — and even that cap is 1% × 365 = 365% a year.

Take 4,000 UAH at the 1% cap. One day costs 40; 30 days cost 30 × 40 = 1,200 UAH, 30% of the loan in a single month. Borrowing it for just the six days before payday would cost 240 — for a week of groceries Sam's family would have bought anyway.

And the clock rarely stops at the first term: if payday doesn't cover it, the loan is rolled into a new agreement and the days keep counting. The same need met with a credit-card purchase inside its grace period would have cost nothing. A rate quoted per day is a signal to work out the yearly one before signing.

Across installments and microloans, a few signs mean a price is hidden somewhere other than the "interest" line. Learn to spot them and ask one more question.

Red flags: the price in parts is higher than paying at once (the extra is a loan); a monthly fee on the full amount (it keeps charging for money repaid); a rate shown only per day or per month (it hides how large the yearly figure is); and "first loan free" with extensions by a new agreement (the business is the second loan and the rollovers).

Two things are the opposite of red flags: a total equal to today's price with no fees is a genuinely free installment, and a disclosed real annual rate is exactly what lets you compare offers honestly. When you see a flag, convert the offer into one all-in yearly number before deciding.