Payment by installments with PayPal – how it works

by Pramith

Paying in installments with PayPal allows you to make larger purchases online with monthly payments

PayPal installment payment with participating shops

Not every retailer offers the option of paying in installments. However, if a seller wants to offer their customers this option, the PayPal service is the solution in many cases. The minimum order value for payment in installments with PayPal is 99 euros. The maximum purchase amount is 5,000 euros.

  • For some time now, online stores have been able to offer payment in installments via PayPal as a payment method.
  • The customer’s creditworthiness is checked in real time via the name, date of birth and bank details, for example via credit agencies such as Schufa, and the installment payment is approved.
  • Payment in installments does not entail any risk for the merchant; this risk lies exclusively with PayPal. The Group pays the entire amount to the merchant and then ensures that payment is collected from the customer.
  • The merchants pay fees to PayPal for this. Although there are no additional fees for the customer, the online stores usually pass on their costs to you via a certain interest rate for the installment payment.
  • It is possible to pay in installments over 3, 6, 12, 18 and up to 24 months. The shorter the term, the lower the interest rate. However, the installments are then higher. It’s worth doing a little math to find out which option is best for you
  • If you want to pay off the remaining amount early, this is possible. Special payments are also an option to shorten the term.
  • You can link the payment of the individual installments to your PayPal account. This means you always have an overview of how many installments are still due and how much is outstanding. In the best case scenario, the installment will also be debited from your PayPal balance

Apply for installment payment directly with PayPal

If the online retailer does not offer payment by installments, you can request payment by installments directly via PayPal.

  • In this case, you conclude an installment contract directly with PayPal, not with the merchant.
  • Choose PayPal as the payment method for your online purchase. If PayPal installment payment is available for your account, this option will be displayed under “Pay later” after logging in during the payment process.
  • If you have selected payment by installments as an option, select whether you would like to pay the amount in 3, 6, 12 or 24 monthly installments. Confirm your selection and, in the next window, your bank details stored with PayPal. You must also agree to the credit check
  • You will then receive an overview and must submit a binding application for payment by installments. The individual installments will be debited from your account every 30 days.
  • You can also make additional payments at any time and free of charge to shorten the term. You can also repay the total amount early at any time. You can find the corresponding option in your PayPal account by calling up the installment payment and selecting “Send payment”
  • PayPal charges interest on installment payments. The effective annual interest rate is between 11.99% and 12.99%, depending on the selected term.

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