Buying on installments in Algeria: the real cost

How buying on installments works in Algeria

When people in Algeria say "par facilité", they can mean three quite different things, and each is priced its own way. The wording in the shop window rarely tells you which one you're looking at, so ask.

• Shop facilités: the seller (an appliance shop, a furniture showroom, a phone shop) lets you pay in monthly parts, usually after a deposit. The price on installments is often higher than the cash price, and that difference is the cost.
• Bank consumer credit: a bank pays the seller and you repay the bank each month, with interest, fees and often insurance. It is regulated, and in Algeria it only covers goods produced or assembled locally.
• Murabaha: the bank (or the Islamic window of a bank) buys the item and sells it to you at a margin agreed in advance, which you pay in installments. Under its own name, Al Baraka describes it as buying your car and reselling it to you "with a profit margin agreed between us in advance".

Whatever form it takes, ask yourself the same thing: how many dinars will I have paid when it's all over, compared with paying cash today? The rest of this guide is about answering that before you sign anything.

How to calculate the real cost of an installment purchase

Say you want a locally assembled fridge costing 150 000 DA cash. The shop offers 30 000 DA down, then 10 payments of 14 000 DA. Here is how to price that offer in five minutes, with nothing more than your phone's calculator.

1. Ask for the cash price and get it in writing: 150 000 DA.
2. Add up everything you'll pay: 30 000 + 10 × 14 000 = 170 000 DA.
3. Work out the extra cost: 170 000 − 150 000 = 20 000 DA.
4. Find the amount actually financed, meaning the cash price minus the deposit: 120 000 DA. The extra cost is 16.7% of that over 10 months, which is a flat rate of about 20% a year.
5. Turn the flat rate into a real yearly rate with the shortcut: flat rate × 2n ÷ (n + 1). With n = 10, that's 20% × 20 ÷ 11 ≈ 36%. A precise calculation gives about 35%.

Why does the flat rate understate the cost? Because you pay interest on the full 120 000 DA for the whole period, even though you hand back part of it every month. By the last payment you owe very little, yet you are still paying the same "surcharge". This is why the shortcut nearly doubles the rate. The bank column is only an illustration: the loan's real cost, known as the taux effectif global, also counts file fees and compulsory insurance, so ask the bank for that figure.

Consumer credit in Algeria: the rules that protect you

Consumer credit was suspended in 2009 and brought back in 2015 under executive decree 15-114 of 12 May 2015 . That decree defines consumer credit as any sale where payment is spread out, deferred or split. It also sets the key safeguard: the total of all your monthly repayments must never be more than 30% of the net income you regularly receive. On a 60 000 DA salary, that means 18 000 DA a month, across all your loans together.

The second safeguard is the ceiling on "excessive" rates. Since instruction 06-2026 of 29 June 2026, a loan counts as excessive once its overall rate is more than 5% above the average banks charged for the same kind of loan in the previous half-year, as TSA reported . For the second half of 2026, that ceiling is 9.89% for consumer credit. In the first half it was 10.36%, as set in the Bank of Algeria's note of 30 December 2025 . The thresholds are revised every six months, so check the latest note.

Bank offers come with their own conditions. For example, the CPA's C'PLUS CONSO finances up to 90% of the price of a locally made good, between 100 000 DA and 700 000 DA, with a monthly payment of no more than 30% of net income. Cars follow the same logic: banks finance only vehicles produced or assembled in Algeria, by classic loan or murabaha, typically up to 90% of the price over at most 60 months, and only when the car is actually in stock at the dealer.

Is "credit without interest" in Algeria really free?

Sometimes it really is. Some sellers spread the payments with no surcharge because it helps them sell. The test is simple: if the total of all installments equals the cash price, and there are no fees, insurance or extra charges, it really costs you nothing. If the shop won't give you a cash price, or the "no interest" price is higher than what a neighbouring shop asks in cash, the interest is hidden in the price.

Murabaha is a separate question. It has no interest rate, only a profit margin fixed in advance, but in dinars it is still a cost you can compare using the method above. Whether a product conforms to Islamic law is not decided by this blog. In Algeria, the Bank of Algeria's rules require banks to obtain a certificate of conformity from the National Sharia Fatwa Authority for the Islamic Finance Industry, which sits within the High Islamic Council, before they sell such products. On late payment, Bank of Algeria instruction 03-2020 allows a murabaha contract to include a compensation amount that must go to charity. For religious questions, the competent bodies are that authority and the High Islamic Council, so ask them directly.

Before you sign: a checklist for installment offers

• Get the cash price and the total installment price on the same piece of paper, signed or stamped.
• Ask what happens if you pay late: penalty, extra charge, or the item taken back.
• Ask whether you can pay off early, and whether that lowers the total.
• For a bank, ask for the overall rate (taux effectif global), file fees and insurance, not just the advertised rate.
• Add the new installment to your existing ones (car, housing, phone, money owed to family) and check the total stays under 30% of your income. If you're paid in cash, use your lowest normal month, not your best.
• Picture the month of the rentrée, Ramadan or the Aïd: can you still pay the installment that month without borrowing elsewhere?

If the sums are tight, saving for a few months often beats paying 35% a year. A daret, the rotating savings circle many families use, can bring the purchase forward without a surcharge; see how the daret works . And if you're unsure where the 30% limit leaves you, start from a monthly budget plan .

How to keep track of each installment until the last one

Most installment problems aren't about the rate. They come from forgetting: two payments due in the same week, a receipt you can't find, or a balance you remember differently from the seller. For each purchase, write down the total owed, the amount and date of each payment, and the balance left.

If you'd like to do this on your phone rather than in a notebook, Jibi, a free budgeting app made for Algeria, has a debts and installments section. You enter what you owe (or what you're owed), record each payment as you make it, and the remaining balance updates itself. You can mark the installment as a recurring entry so it appears every month next to your salary and rent, and the monthly budget warns you when a category gets close to its limit. Jibi never connects to your bank, Algérie Poste or BaridiMob, and never asks for card details: you note what you pay. The guide Keep track of debts and installments shows how.