In the non-bank lenders industry, it is possible to get an interest-free loan, which is also called the first loan without charge and you can actually get the first loan without paying any interest and paying just as much as you received. And then, naturally, most people immediately wonder how something is possible and how these companies can earn from such services if they do not get any profit from such credit.
There will be an explanation here that it is possible! In the so-called fast credit field, there is very strong competition and lenders are struggling for every customer that is available and therefore at some point one of the companies thought it would be possible to give the first loan free of charge to attract new customers. .
Quickly discovered by other market players
In this way. But it was also quickly discovered by other market players, and then the situation was that if you did not provide such a service, customers would look at you with a negative eye and would prefer to choose the services where you can get the first loan for free But the main thing is how then these lenders can actually earn this and already have a slightly more cunning scheme.
In essence, any creditor will earn money from its customers only in the long term, because with a single loan the potential profit is small and the real profit comes from several loans over many years. So here’s how to attract new customers at the beginning by offering loans without interest, companies hope that in the future this customer will bring them more profit. And in fact, at the beginning, every person that a business manages to attract to them causes a loss, because giving money, servicing a loan and keeping a company costs money, but giving money free means that it is a loss.
Additional credits directly from the same creditor
And then the hope is that these customers will then take on additional credits directly from the same creditor, and thus they will recover the losses and also make a profit. Of course, a large part of clients borrow this once and borrow from another creditor the next time, causing losses to all businesses, but certainly there are enough people who still use the same lender, and that is where the profits come from.
That’s why this offer is still available
This is also a very good way of seeing competition from the market economy, leading to more profitable services, which are ultimately more beneficial to the consumers themselves. But if you are one of those people who use quick loans then you should think that such a service would not make you addicted and then you would like to borrow more and more, which is what the creditors are dreaming about, because they will be able I earn. But if you really need quick loans again then you better use another service provider instead of borrowing with big interest.