Attention, Trap: Zero-Percent Financing Bears Risks For Consumers
There are many offers for zero percent financing: Buy now, pay conveniently in installments and without interest. More and more dealers are enticing customers with interest-free loans for their new car or TV. However, financing without interest can be expensive. A zero percent loan is often not as cheap as it seems at first glance.
What is behind a zero-percent loan?
Advertising promises with a zero percent financing are omnipresent today: furniture stores, car dealers and electronic markets offer the purchase of many products with an uncomplicated financing without interest.
More precisely, the buyer takes out a loan with a bank with which the dealer cooperates. The bank then reimburses the dealer directly for the agreed loan amount. The buyer therefore pays the bank back the sum in monthly instalments. Basically, this is a classic instalment loan. With zero percent financing, two contracts are concluded in principle: the purchase contract with the dealer and the loan contract with the bank. (more…)
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