Installment.. A solution for securing needs or a deferred burden..??
Amman4 min read
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Many Jordanian families are turning to installment purchases to secure needs that are difficult to pay for in one go, at a time when the ability to buy goods and services is increasingly linked to income size and monthly obligations. While installment allows the family to obtain their need without paying the full amount, the accumulation of installments may turn this method from a temporary solution to a long-term burden.
Amal Ahmed, a mother of three, says that installment has become an option the family resorts to when more than one need coincides, especially when buying electrical appliances, furniture, or some supplies that are difficult to provide in cash. She believes that the monthly installment amount seems manageable at first, but the problem starts when multiple obligations accumulate, making the total installments larger than the family's financial capacity.
In the market, many stores offer installment options for high-priced goods, while the consumer often focuses on the monthly installment amount when making a decision, without paying as much attention to the final price they will pay after the repayment period ends.
Data from the Central Bank of Jordan shows that total individual indebtedness reached about 14.035 billion Jordanian dinars by the end of 2024, including about 5.734 billion dinars in housing loans, 4.481 billion dinars in personal loans, 1.842 billion dinars in car loans, and 1.312 billion dinars in consumer loans. These figures provide a picture of the size of individual credit obligations, although they do not represent all installment transactions that occur directly between consumers and stores.
Meanwhile, the latest economic indicators from the Central Bank show that the inflation rate reached 2.2% during the first eight months of 2026, while the main interest rate was 6% on September 21, current indicators that emphasize the importance of considering the cost of financing when deciding to buy on installment, rather than just the installment amount.
Financial expert advisor Ibrahim Bashara attributes the spread of installment to a number of factors, including rising living costs and prices of essential goods and services, alongside the spread of electronic payment methods, credit cards, and 'buy now, pay later' services.
The need for families to buy durable goods, such as cars, electrical appliances, and furniture, makes installment a viable method for distributing the cost over a longer period.
Bashara believes that installment can be appropriate when directed towards purchasing an asset that maintains its value or helps increase income, or when it relates to a basic need, provided that the financing cost is low and the family has a clear ability to repay the installments without affecting their essential expenses.
However, the picture changes when installment is used to buy luxuries or goods that lose value quickly, especially if accompanied by several obligations at the same time.
Bashara warns that what seems like a 'small installment' may turn into a heavy burden when all installments are combined, as multiple obligations reduce the space available for the family to save and face emergencies.
One of the most common mistakes, according to Bashara, is focusing on the monthly installment and neglecting the total cost, as the installment may be low, but the long repayment period, administrative fees, financing costs, and late penalties may increase the final price of the item compared to its cash price.
Therefore, Bashara advises the consumer to start their calculation from the final cost, compare it with the cash price, and ask about all fees and conditions before signing the contract.
He also warns of the 'trap of small installments', where each individual payment seems acceptable, but the combination of several payments may drain a significant portion of the income.
Bashara sets a practical rule that the total monthly installments and obligations should not exceed about 30 to 35% of the fixed monthly net income, leaving a margin for essential expenses, emergencies, and savings.
He also calls for not rushing into unnecessary purchases and giving oneself a period to think, which may extend from 48 hours to a month for large purchases, to ensure that the decision is based on a real need rather than a temporary desire.
In the end, the issue is not with installment itself, but with what we buy, how much we will pay in the end, and whether we can bear the commitment without putting pressure on the family's needs and savings. The installment may open the door to a necessary need, but it may become a deferred burden when it exceeds the limits of financial capacity.
