Generally, a loan is a financial instrument that serves a dual purpose.
On the one hand, there is a contractor who needs a certain sum of money. Thanks to the loan, therefore, you can immediately have capital that has not yet been accumulated and, on the other hand, you will have to pay interest to the creditor.
On the other hand, we find the lender that performs this type of operation to make a profit. This gain is obviously represented by the interest rate.
However, in practice, financing methods have evolved to the point that today we are witnessing real zero-rate loans. To try to better understand this phenomenon, it is good to analyze this type of financing to understand if the cost is really zero. Let’s start by saying that the cost of a loan is not calculated only by interest, but other amounts come into play that the bank defines as commissions or accessory costs.
These costs do not enter the calculation of the nominal annual rate, the famous TAN, since, in essence, they do not represent interest. Zero-rate loans, therefore, generally consider this cost component, and therefore it is incorrect to say that no expenses should be incurred. Of course, by zeroing the interest rate you have great savings, however, it is not said that everything is really what it seems.
These loans are often made to buyers of consumer goods. Therefore, they only serve the function of allowing a seller to offer their customers the possibility to pay with an interest-free extension. Thanks to this tool, commercial offers have multiplied, indicating the possibility of paying a certain asset in installments, specifying that accessory costs will not be paid.
In reality, other types of costs, such as practical openness, should also be considered. In fact, even if the loan does not have a positive TAN component, the bank will bear the costs of the concession and want to be reimbursed for at least those. For this reason, care should be taken when deciding to take advantage of this type of offer because very often you will have to pay at least some additional costs.
The retail market and the world of credit always evolve a lot and, therefore, even more, innovative concepts have been developed. To date, it is indeed possible to actually take advantage of loans at a real zero rate, let’s see how. Increasingly fierce competition has led some vendors to decide to bear the cost of opening themselves. In this way, they can really provide their clients with the possibility of obtaining a payment extension without paying anything additional. They simply have to periodically reimburse the cost of the purchased item and they don’t have to worry about anything else.
Certainly, this possibility is very convenient even if things are not always as they seem, even in this case. In fact, some vendors may decide to offer this solution; however, they try to safeguard their percentage of profit by transferring the costs of accessories directly to the cost of the object in question. For this reason, it would be possible to find a price within which the additional cost component is already present. In these cases, there will only be the illusion of not paying the lender anything while, in fact, it has already been done.