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In this case they make they money with people that forget about it, or do it late and pay huge premiums. I don't want to encourage this business model, that's
by elcomet 7y ago
In this case they make they money with people that forget about it, or do it late and pay huge premiums.
I don't want to encourage this business model, that's why I don't do it.
- pas 7y agoNo, they offer the credit to incentivize you to make the purchase right now, don't think about how to pay it now, because ... you can just pay it over a year. And it's perfectly okay for example if you just bought a new flat and you're broke as fuck, because you spent all your cash on must-repair stuff, like getting the plumbing in order, but you also fancy a new bed, because you have none, so interest free bed it is! Of course if you barely make enough to live month-to-month, then it's unlikely you'll be able to pay the monthly installments of the loan. (And usually you'll be declined even the in store zero-interest loan too.)
- elcomet 7y agoBut why do the banks do it if they don't get any interest? It seems they are just loosing money here.
- pas 7y agoHave you seen eg. Germany's bond yields? They are negative. People love safe money parking, they don't want to take risks, manage investments, oversee companies, fiddle with product development, bet on innovation, think about market fit. So they do the next best thing, try to come up with minimal risk minimal profit financial products, and that's what these furniture/fridge/oven loans are. Furthermore the shop pays some service fee to the loan provider, and thus they scrape by.