It is unlikely that anyone will be able to remain indifferent to the proposal to take a loan that does not imply payment of interest. Yes, the offer is indeed more than tempting. It’s the same as borrowing from a best friend.
Today, interest-free rates can be heard from any source of information. All organizations are only thinking about how to attract borrowers. Interest-free loan! It sounds, of course, incredible, but many take it without hesitation. Cautious people always see a catch in such sentences. Convincing them is quite difficult.
Interest free loan
In general, it can be on a wide variety of goods. Some organizations even offer interest-free auto loans. It’s not hard to imagine how big the sum is. Yes, an interest-free car loan does exist.
Let’s look at things not through pink glasses. It is no secret that the bank receives the main profit from loans. That is, his main income is the interest that borrowers pay on their loans. What kind of profit will the bank receive if it provides a loan at zero percent? Think correctly, his profit will be equal to the same zero. The situation may seem pointless and absurd.
If an interest-free loan does not bring benefits to a financial organization, then why is it needed at all? Let's open the secret: there is still a percentage. The bottom line is that it is hidden. There are two possible options: the percentage is included in the price of the goods or included in the commission. In the first case, this is not about a bank loan, but about the most ordinary installment plan provided by the store. In both cases, the lender will do everything possible to prevent the borrower from detecting an overpayment.
If the bank pledged interest in any commission, then it is not always easy to calculate them. The fact is that when filling out documents, bank employees will mention them in passing. The borrower will not receive any detailed explanations. All banks act in their own way. In some cases, customers are asked to pay a commission so as not to pay a down payment. In truth, this installment will not be assigned to loan payments - the amount that will have to be paid will remain the same.
Banks may require a fee to be paid for transferring bank funds, opening an account, and other banking operations. At first glance, these amounts will seem small, but in aggregate they may surprise you. As a rule, in this way the bank takes away from the creditor about ten percent of the issued amount.
Banks often show imagination. They may ask for a surcharge for servicing accounts, for considering an application, they may even declare that they will have to pay a commission for the fact that the loan was issued in cash.
It is worthwhile to understand that a loan cannot be interest-free if any additional payments are implied.
Today, the market for goods is very fierce competition. Everyone is trying to get around each other. Entrepreneurs, opening stores, are trying to cash in by no means honest ways. Which ones? They rumor that they offer interest-free loans, and they themselves include all interest in the price of the goods. It is not always possible to calculate that a product should really be cheaper. Stores that do not value their name can sell low-quality cheap goods (however, like two drops of water similar to good) at excessively high prices. To confuse the buyer and impress on him that interest-free credit does not exist is so difficult. People are subconsciously drawn to saving. What is the result? As a result, they can overpay a good amount.
Interest-free credit is a myth. Do not trust those who offer it. An interest-free loan is an excellent marketing move that helps stores and financial institutions make money on naive citizens.