For banks, such conditions also serve as one of the ways to attract new and increase the loyalty of existing clients. In addition, in many cases, they are helped to compensate for the lack of direct payment for using the loan by:
Fees for providing other banking services directly related to lending. For example, a fee for issuing a credit card, its annual service, or transferring funds.
Penalties for failure to comply with credit terms. Thus, if the client does not return the funds provided on the card during the interest-free period, he will be charged interest for the entire term of the loan.
Advantages and disadvantages of interest-free loans and credits
The advantages of interest-free microloans include:
Relatively simple and quick registration procedure.
Lack of proof of income and employment.
A more loyal approach to assessing borrowers. Clients with armenia mobile database a bad credit history and with overdue payments on previously received loans can receive money. In MFOs, clients are less likely to face refusal.
Possibility to receive cash directly on the day of application.
Flaws:
They are usually provided once to new clients.
They are issued for a short period and in a small amount. An interest-free loan is usually provided for a period of no more than one month, and its amount does not exceed 20-30 thousand rubles.
Provides severe penalties for failure to meet repayment deadlines.
At the bank, you can get a loan without paying interest on more favorable terms - in a larger amount and for a period of up to 10 months or longer.
With due discipline, it is indeed possible to use a credit card interest-free. But to do this, you need to maintain financial discipline, rationally plan your budget and not allow late payments on the loan.