Can someone explain to me this ~

Ummm im 14, I just want to know what is interest free. I think its a money system but have no idea of how it actually works.

So if something is about say $992 Aus dollars. How can “Interest Free Deals” Work ? ?

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Answer #1

‘Interest’ in financial terms means a sum paid or charged for the use of money or for borrowing money.

For example, if you put $100 in the bank, your savings can slowly ‘grow’ from interest alone, at say, 0.15% per month of the amount in your bank. If you save your money in an interest-free bank account (which doesn’t exist, I’m just giving an example), then the $100 you put in there will stay as $100.

Another example is say you’re buying a TV, and you decide to break it up and pay for it for over 8 months. Usually, companies will charge you interest (say maybe 5% of the full price each month) for stretching out a payment. But when you get an ‘interest-free deal’, then you just have to pay the cost of the TV.

Answer #2

Absolutely backbyter. Many retailers will say “buy now and don’t make a payment until November 2009” (one year later), but as stated, look at the fine print. Once the year is up your ‘debt’ usually has a 21% or more interest rate. Very Very high. This is where they make their money, from those who don’t or can’t pay off the loan before the ‘interest free’ deadline

But it is a good deal if you are disciplined and make payments throughout the year and pay it off. Then in your example you would have only the $992 dollars to repay. That would be $82.67 dollars a month.

And if the ‘interest free’ time is 6 months your payments to get it paid before the ‘interest free’ deadline would now be $165.34 a month.

Just be careful of going over the time limit they give you.

Hope these posts help.

Answer #3

THANKS MAN! love you all ~ xD