If you purchase an asset, you have many options as to the payment. One is the cash basis and the other is credit basis. In cash basis, you pay no amount of interest. However, on credit basis, you would be required to pay the interest amount in addition to the cash price of the asset.
Under the credit basis, you have two options. Eihter, you buy the asset over installment or Hire purchase arrangement. The payment method in installment and hire purchase is same because you pay some down payment in each method. However, in installment sales, the ownership is also transferred to the buyer. On the other hand, in hire purchase, owenrship remains with the seller. In hire purchase, ownerhsip transfers to the buyer of the asset once the last payment is made.
