Banks regularly tempt potential customers by offering them “loans with an interest rate of USD 0” and “loans with zero interest”. Unfortunately, after a deeper analysis of such offers, it often turns out that they are no longer as attractive as they appear. In the article we will check whether you can get a free loan from the bank. We will also tell you what in practice lies under the tempting sounding slogans “loan with 0 percent interest rate”.
When analyzing the offers of loans available on the market, most people pay attention primarily to their interest rate. In the eyes of many potential customers, lower interest is a cheaper loan.
Is this really the case?
Unfortunately, this thinking is not reflected in reality. It often turns out that a lower-interest loan in practice turns out to be more expensive than the one charged with standard interest. How it’s possible? The total cost of the loan consists not only of interest, but also commission, any preparation fee or insurance. This is the sum of all fees. Lack of interest on loans with 0% interest rate, banks often compensate for the inflated commission. To illustrate this relationship, we will use a specific example.
The value that accurately illustrates the total cost of borrowing money per year is the APRC, which is the actual annual interest rate. It includes all the costs associated with borrowing money. The lower the APRC, the cheaper the loan.
Free bank loan?
Do banks offer free loans? Is it possible to take a loan from the APRC in the amount of 0% using their services? Unfortunately, it is not possible to take out a bank loan for USD 0. The only option banks offer their clients are loans with 0% interest rate. Although it may perceive them as extremely beneficial, the real costs of such financing are no longer so attractive.
If you want to borrow money absolutely free, use the services of a non-bank financial institution that provides free payday loans.
The loan is cheaper than in a bank
Although hard to believe, popular payday loans don’t have to be expensive. What’s more, they can be much cheaper than bank loans. Cheaper and even completely free. Currently, there are as many as a dozen or so websites providing free loans. These are financial products targeted only at new customers. The purpose of granting them is to attract (and retain) as many new clients as possible.
When you get a free payday loan, you will be required to pay the lender exactly the amount you borrowed from him. You will not pay any interest, commission, insurance or any other borrowing costs – the APRC of the free payday loan is 0%.
Although loan companies do not earn directly on providing free loans, the source of profit is for their clients who stay “for longer”. For example, those who, after paying off their first free loan, will reach for another one, in the standard way.