iStore FNB Budget Plan - Please explain like I am five

[thighranosauras]

I don't know why I cannot wrap my head around how this works. I understand that the full amount of the product is made as a straight payment to iStore, but then is the full purchase amount sent back to me, but sent to my credit card budget facility?

Do I then pay off the device like I would pay off a contract?
Do I have access to the funds in my budget facility during the installment payoff time?
Why would I use this option, as opposed to paying cash, if I would need to pay the full amount upfront and don't have access to the funds?

Please can someone break it down for me? I am clearly a layman.

 

[maxxis]

You must have enough available on your credit card to make the purchase

FNB will then shift the purchase to your budget facility at a reduced interest rate. 6% was mine.

You can pay it off faster if you want without penalty.

 

[C4Cat]

You must have enough available on your credit card to make the purchase

FNB will then shift the purchase to your budget facility at a reduced interest rate. 6% was mine.

You can pay it off faster if you want without penalty.

You've just repeated what was in the image, so doesn't really explain much.
The full amount comes off your credit card and then, do you get that amount back into your account within 3 - 5 days later? With the amount reflected on your budget account, to be paid back over time? It is pretty confusing.

 

[CranialBlaze]

It’s basically a low finance option with a maximum repayment period. If you can afford to offload all the money at once no real point, but the interest rates results in it being minimally more expensive over the finance period.

 

[thighranosauras]

You've just repeated what was in the image, so doesn't really explain much.
The full amount comes off your credit card and then, do you get that amount back into your account within 3 - 5 days later? With the amount reflected on your budget account, to be paid back over time? It is pretty confusing.

RIGHT?! I don't get it. I've spoken to two customer support agents at FNB and I even spoke to the sales agent at the iStore and she couldn't explain it...

I am waiting to pull the trigger but cannot understand how it works.

 

[thighranosauras]

It’s basically a low finance option with a maximum repayment period. If you can afford to offload all the money at once no real point, but the interest rates results in it being minimally more expensive over the finance period.

Okay but after paying the full amount do they give the money back to me? Then do I pay off as instalments at a lower interest rate?

 

[thighranosauras]

You must have enough available on your credit card to make the purchase

FNB will then shift the purchase to your budget facility at a reduced interest rate. 6% was mine.

You can pay it off faster if you want without penalty.

When you say shift, do I get the full amount back, and then do they take a specific installment amount out of that budget facility each month? Do I have access to those funds while I pay off the device?

 

[3WA]

Please note that the full value of your purchase will reflect against your credit balance and will only become available as instalments are paid each month

iStore South Africa | South Africa's Widest Apple Range Online iStore FAQ

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www.istore.co.za

 

[acidrain]

When you say shift, do I get the full amount back, and then do they take a specific installment amount out of that budget facility each month? Do I have access to those funds while I pay off the device?

No. The full amount is rather transferred to your budget facility. You will then pay a fixed fee over the budget period at the defined interest rate, whereas if you just kept it on the straight facility you would pay the minimum amount of 2.5% monthly and the interest rate would be that assigned to your normal credit facility.

 

[thighranosauras]

iStore South Africa | South Africa's Widest Apple Range Online iStore FAQ

Shop South Africa's widest Apple product range at iStore. Free, fast delivery nationwide — get the latest iPhone, iPad, Mac, and accessories delivered to your door.

www.istore.co.za

Okay so as soon as the payment period begins, I will get access to the full value of my purchase again?

 

[e4et]

When you say shift, do I get the full amount back, and then do they take a specific installment amount out of that budget facility each month? Do I have access to those funds while I pay off the device?

Yes. you get the amount back in your straight facility.
That amount then becomes part of your budget and you pay it off monthly at the rate specified

 

[3WA]

Okay so as soon as the payment period begins, I will get access to the full value of my purchase again?

My understanding of that sentence is that as you make an installment, that installment amount will become available to you again.

 

[CranialBlaze]

Okay so as soon as the payment period begins, I will get access to the full value of my purchase again?

Go to iStore.
Pay with FNB card and tell them to use the budget deal.
Full amount will leave your strait facility.

With a few days, it depends, first time I did it was 2, 2nd was like 5 and the last time was closer to 2 weeks, either way that amount gets credited to your strait facility and debited to your budget at the specified rate for the specified period being repayed at the advertised monthly amount.

At ANY point in time you can pay money directly into that transaction (with some effort) from your credit card, so if you chose to take it over 15 months and felt like paying it off in 3, you can do so and save on interest.

 

[e4et]

Okay so as soon as the payment period begins, I will get access to the full value of my purchase again?

I

Okay so as soon as the payment period begins, I will get access to the full value of my purchase again?

I doubt it, as that would esencially mean they increase your budget credit limit with the amount owed.

 

[KleinBoontjie]

How does the 6% interest work, if they calculate a fixed installment over 36 months. Is it 6% per month or per year. I mean, like the iPad Pro is R24999 once off, but on FNB option it is R838 over 33 months works out to R27654.
R2655 doesn't seem to be 6% per year. Seems less. Will months or install vary after a while of interest?

 

[CranialBlaze]

How does the 6% interest work, if they calculate a fixed installment over 36 months. Is it 6% per month or per year. I mean, like the iPad Pro is R24999 once off, but on FNB option it is R838 over 33 months works out to R27654.
R2655 doesn't seem to be 6% per year. Seems less. Will months or install vary after a while of interest?

Compounded interest, something they don’t teach in schools.

They take the outstanding amount, work out 6% per annum on that, after each payment that is recalculated, so effectively each month has a marginally smaller interest portion allocated.

As they are smart people #notreally, they can calculate the total cost factoring the decreasing compounded interest charges.

 

[thighranosauras]

Thank you everyone for all the replies. Seems I am not the only one who is having trouble understanding the payment option...

Okay, another question, probably more importantly...

Since you have to have the cash in hand before choosing either cash or FNB budget plan, which would be the better option financially, and if I will want to upgrade my device in a year or two? With the FNB budget plan, iStore allows you to trade in the device and offset your remaining installments. Is this worth it?

 

[Pineapple Smurf]

This is high-grade Maths
I don't have Matric
Sorry Lads, you're on your own here

 

[CranialBlaze]

Thank you everyone for all the replies. Seems I am not the only one who is having trouble understanding the payment option...

Okay, another question, probably more importantly...

Since you have to have the cash in hand before choosing either cash or FNB budget plan, which would be the better option financially, and if I will want to upgrade my device in a year or two? With the FNB budget plan, iStore allows you to trade in the device and offset your remaining installments. Is this worth it?

That’s really up to you, iStore will trade in to offset the new device, what you may or may not owe FNB at the time is your problem.

I did this with my 11 and 13, and frankly for the 13 I had the cash on hand but over 2 years the cost difference is pretty minimal so I quite literally still have the cash on hand, it became and “in case **** happened” fund instead of an “iPhone” fund, which is what it was literally for.

 

[C4Cat]

Thank you everyone for all the replies. Seems I am not the only one who is having trouble understanding the payment option...

Okay, another question, probably more importantly...

Since you have to have the cash in hand before choosing either cash or FNB budget plan, which would be the better option financially, and if I will want to upgrade my device in a year or two? With the FNB budget plan, iStore allows you to trade in the device and offset your remaining installments. Is this worth it?

I think the confusion comes in because you think you need to have the cash in hand. Actually you need to have enough credit available on your credit card. Usually you would pay really high interest rates and you have to pay it back as quickly as possible because they charge high interest for every month you have a credit card balance that needs to be paid. By converting it to budget, it means a much lower interest rate and you only have to pay back a portion every month. Or something like that.