Free loan – the beginning of problems
Non-bank loans are relatively expensive. They are often referred to as “high-interest loans”. This is due to, among others from the risk borne by the loan company by making commitments from its own resources.
A free loan is a tasty treat
It is not surprising then that when we have the opportunity to take advantage of a promotional offer that allows us to give back exactly the amount we borrowed, it is easier for us to decide to take out a loan.
Unfortunately, an emotional approach to the case and giving in to the temptation to raise extra money for free can lose us.
Failure to repay the loan on time
First of all, it should be remembered that the commission and the interest rate on the loan will be 0 USD only if we discharge the contract and pay the amount due within 30 days of the commitment. Failure to settle the loan within the deadline results in the initiation of debt recovery proceedings, as in the case of a traditional loan.
Prompts in the form of an SMS, employee’s phone, e-mail or registered letter, request for payment, activities of a debt collection company – all this raises additional costs that increase our debt, and thus impede its repayment. But this is not the end of the consequences of delay. After 60 days, information on debt higher than USD 200 will be forwarded to the registers of debtors – National Register of Debtors, ERIF Register of Debtors and BIG Monitor.
As a result, we can close our way to further loans, and certainly to bank loans. Although in most companies offering free loans we have a month to give them away, but there are also proposals that condition that the commitment will be free only if we return it within 15 days. This is the case at Money Time, where a loan of up to USD 500 is waiting for new customers.
Free loan with caution
A free loan can be a good way to improve your home budget, provided you answer some key questions before you take it. First of all, you should make a statement of income with expenses to know if we really need additional money, or whether we can save the given amount from the current pool.
The analysis will also tell us how much we actually need to meet a given need. Thanks to this, we won’t take the sum too much. Let’s avoid acting according to the “maybe someday” principle. Before you get a loan for USD 0, you should consider the fees of several lenders for late repayment or extension of the loan.
It is also important that when planning to make a commitment, it should also be assumed that sudden payments may arise during the payment period, which will thwart the plans for the timely repayment of a free loan.