Judging Purchases by Real Cost, Not Sticker Price
Interest-free installments or a cash discount — the recurring dilemma of every big purchase. The answer lies in real cost, not nominal amounts. The real cost of paying in full is simply the discounted price; the real cost of installments is the total paid minus what your kept lump sum earns in the meantime. This calculator computes both on the same basis and shows the winner and the gap.
Fees use the equal-installment method: each month the fee accrues on the remaining balance, so fees shrink and principal grows over the term — the monthly table shows fee, principal, and balance per payment. A 1.2M KRW purchase at 5.9%/yr over 12 months costs about 103,225 KRW/month, 1,238,695 total, with roughly 38,700 KRW of fees.
Interest-free plans are structurally favorable: buying 1.2M over 12 interest-free months while your cash earns 2.5%/yr puts the real cost at about 1,183,500 KRW — roughly 16,500 KRW cheaper than paying list price upfront. A cash discount changes the picture: the break-even discount in that scenario is about 1.34%, and anything above it makes paying in full win. Against a 5.9% fee-bearing plan, a 2% cash discount wins by about 47,000 KRW.
Tips: interest-free purchases are often excluded from card rewards, which narrows the gap, while installments occupy your card limit longer. For partial interest-free plans, run the fee-bearing months separately. Use the compound interest calculator for where your lump sum sits, and the prepay-vs-invest calculator for bigger financial decisions. This tool is a simulation whose result depends on your assumptions.