For zero-interest loan, check cash discount

http://www.business-standard.com/india/news/for-zero-interest-loan-check-cash-discount/378845/

Summary:

The article stresses that the term zero-interest loan is just a bait to lure innocent buyers to make purchases that does not really make them better off. The Reserve Bank of India often reminds consumers that zero-interest loans could be misleading about the true prices of products. These schemes are usually set up on expensive electronics. Malhar Majumder, a principal financial planner of the Black and White Financial Managers, claims that a lot of consumers forget to bargain whenever they see zero-interest loan. He also suggest that consumers should check with their credit card companies to see if there are any offers with no hidden charges and processing fees, because these offers are usually cheaper than zero-interest loan

Connection:

Cash discount is supposed to be a reduction on the amount that a consumer needs to pay. Companies lure consumers into their schemes of purchasing high price products with zero-interest loans, consequently, consumers will forget to bargain like asking for a cash discount.

Reflection:

The concept of cash discount in general should benefit both the firm and consumer. However, firms who set these zero-interest loan schemes up to trick consumer will only benefit the firms and not the consumers. This is because consumers would end up paying more interest rate, hidden charges, and processing fees than the zero-interest loan.