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POSTED BY ON January 14, 2014 11:59 am COMMENTS (6)
Dear sir,
I herd a news that, Bajaj Fin lending services is giving loan to purchase house hold articles/ electronic items of Branded companies, is it true as they tell its on 0 % interest. How it’s possible & which way they benefit from this ?
Can i go for this ?
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There have been quite a few articles covering this topic. There are cases that involve a processing fees but there are many don’t have any such thing, at least not in those words.
Turns out, the retail outlet has a tie up with the financing institution to offer some products at a lower cost. That lower cost does not benefit the customer directly – ask for discount and you’ll know (beyond a particular value it won’t be of benefit to either the retailer or financing inst.). However, that ‘lower cost’ finds itself adjusted in the interest part. Customer sees 0%, retailer see lower margin per item but larger volume of purchase, financing inst. gets its cut from the margin that the retailer foregoes. Everyone is happy – socialism (pseudo) and capitalism at work!
No secret is there…
Dear Ashish, in case of 0% offers, there is processing fee, then the selling price and one more earning come to financier from the manufacture. In your case, the LCD manf. provided some money from it’s own pocket in the form of comission. that’s how these 0% offers work.
Thanks
Ashal
Dear Maheshwar, nothing comes free in thisn world. first you need to pay a processing fee upfront. Also the cost of the object you are purchasing ‘ll be higher on loan purchase against an outright purchase by you. Please calculate on your own and see the difference. Do not get lured by 0%.
thanks
Ashal
Hi Ashal,
I have purchased quite a few electronic items in past through 0% interest offer from Bajaj Fin Serve. Never realised that if I am paying something extra. Below is one example:
I purchased one LCD & HTS from Croma store through this Loan. I negotiated the price of Rs.37,765 with the executive and then I said I will be taking it on loan. He readily agreed without jacking up the negotiated price. I paid Rs.12592 upfront and rest Rs.25,173 in 8 EMIs of Rs.3148 each through ECS. Processing charge of Rs.700 paid.
Now when I calculate, the total additional money that I paid is the processing and some Rs.11 as difference. But apart from this nothing else, which I feel is not a bad deal. But I am still wondering is Rs.700 enough for them to run this business?
Ashish
It is really not 0%. They earn through processing charge.
Check whether it is really 0%, before finalising.