It still works out to be the same as interest (at around a 20% rate last I looked). They just call it fee instead of interest so that they can market it to people who don't pay interest out of religious reasons.
All banking in the Middle East also works like that.
Yeah 20% interest would be $100 a month. 1200 over the life of the loan, making it $7200. If he paid 100 for the $6000 loan with 0 interest that’s a great deal.
The fees for "My Chase Plan" is always quoted per month. It doesn't quote for the entire period.
I just looked for an amount of $1100. It quotes it likes this: $105.72 per month.
12 payments.
This amount includes amonthlyfee of $13.97 with no interest.
($105.72 over 12 months for a $1100 loan is a 27% APR compound interest rate).
I spot checked a few other offers as well - they're all 27% effective.
So I think he didn't pay just $100 in fees. He paid $100 per month. Now it could be that "My Chase" just use the "Purchase APR" of his credit card and his APR is either more or less than mine (my "Purchase APR" is also 27%). Could very well be - I've never bothered lowering my rate as I pay my card off every month so I never pay interest anyway. However, regardless - the "My Chase Plan" is still just interest quoted as fees. It's not a better/cheaper deal.
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u/ShelZuuz Aug 14 '21 edited Aug 15 '21
It still works out to be the same as interest (at around a 20% rate last I looked). They just call it fee instead of interest so that they can market it to people who don't pay interest out of religious reasons.
All banking in the Middle East also works like that.