There is hardly a day, on which we are not offered anywhere a product with a 0 percent financing, so a credit with 0 € interest charge for a new car, a new TV or other consumer goods. Be it on TV, on billboards on the street or in one of the numerous brochures that land Daily our mailbox-the offer is varied and equally seductive. Finally, this credit offer suggests that the consumer is a real bargain – no interest and also small monthly rates over a longer period of time to repay the credit. What more do you want as a customer? But that is precisely the Crux, according to consumers ‘ supporters of the consumer centre of North Rhine Westphalia, because the so-called zero percent financing has its pitfalls and is anything but what they claim to be: namely, cheap!
Zero percent loans or lending have its pitfalls!
Granted: a loan with zero percent interest – such an advertising promise undoubtedly gives the impression of an unbeatable credit offer. However, the appearance is deceptive and the reality is quite sobering with a closer look at corresponding loan offers and often ends in the realization, that as a consumer with a zero-percent financing in comparison to a classic installment loan often paid. In most cases, practice shows that a classic installment loan with interest from a Bank is usually a significantly cheaper alternative loan.
The dangers of a Zero percent financing
The most obvious criticisms and potential dangers of so-called zero percent financing are:
• The consumer will be denied the so-called right of withdrawal, or it does not apply!
• If the financed goods are returned or claimed, the credit for this product continues for the time being! A corresponding withdrawal from the credit agreement can only be achieved with considerable effort.
• Financing of any kind finds its way into one’S own lender and places a considerable burden on the so – called credit score-and this is negative!
Why are zero-percent loans still so popular?
Looking at the first glance, a loan without interest is actually awarded for the acquisition of a product on instalments. The credit seems to be offered directly by the dealer, but far from it, because the actual credit recipient is a classic Bank. And as it is well known, a Bank does not grant interest-free loans! As a result, as with any other loan, interest is payable on the so-called zero percent financing. Only, this interest shall bear the costs, not the customer, but the dealer, and for good reason, because he can advertise with small monthly installments and generate significantly more revenue. But on the interest, which he apparently bears, no dealer wants to sit and so these credit costs are simply included in the selling price. The customer is thus led to the sale with a simple but highly effective Trick, because the customer only pays attention to the low rates and the 0 percent interest.
It’s a good idea to calculate and compare!
It turns out again and again that not every tempting offer is also a good one! Thus, the recommendation is clear: if you add zero percent financing to the offer, it is often the result that the sum of the individual rates is often significantly higher than the cash payment price of other providers. The Zero-percent credit is therefore, unfortunately, often a bad deal.