Many customers wonder whether there are any catches in such offers—after all, companies do not earn anything from free loans. As it turns out, free loans are in most cases highly profitable for companies—we explain why below.

A Free Loan—Designed to Attract New Customers

Non-bank loans over the Internet have become so popular that the market continues to see more companies offering either online payday loans or larger installment loans. There are already several dozen of them, about 20 of which are recognizable brands that have been operating for many years. Over the past 10 years, the loan market grew continuously, but the pace of this growth has recently slowed noticeably. Although loan companies are lending increasingly more money in terms of value, in 2017, for the first time, their customer base did not grow. This fact, together with enormous competition in the market, means that lenders have to compete for customers in various ways. One of them is the first loan for free. By design, it is intended to encourage customers to try a new loan without taking on any risk. The promotion means that the borrower repays exactly the amount borrowed. It is worth noting that companies are constantly increasing the maximum amount available under these free-loan promotions in order to compete with other lenders in this respect as well. The opportunity to borrow money for free turns out to be an effective lure. As the comparison website https://pozyczasz.pl/pierwsza-pozyczka-za-darmo shows, several dozen companies currently offer free loans. It is also an excellent way to take customers from competitors. Instead of taking out another loan from the same company and paying high interest, it is better to change lenders so that, as a new customer, you can take advantage of the promotion and save on costs.

A Promotional Loan for PLN 0—An Effective Test of Customer Reliability

There are no catches in the free-loan promotion for new customers, but there is one important condition that must be met to actually be exempt from loan costs: the obligation must be repaid on time. If a new customer takes advantage of a free online payday loan but is even one day late returning it, the loan company has the right to charge standard costs as well as late-payment interest. In practice, many loan companies in such cases waive the standard fees, but instead charge fees for what is known as extending the loan repayment deadline, which allows the customer to avoid collection proceedings.

A promotional free loan therefore allows loan companies to gain many benefits:

  • attracting a new customer—very often from a competitor
  • gaining a reliable customer and earning money from them in the future—if they repay the loan on time, they will easily receive another one (most people who use payday loans take out another loan within a few months)
  • earning as they would from a regular loan—if the customer is late with repayment.

Everyone Benefits from the Promotion

In the case of the first-loan-for-free promotion, it can be said to be a win-win offer, meaning that everyone wins: borrowers have the opportunity to borrow the cash they need completely free of charge, while loan companies not only gain a new customer but also get the chance to test their reliability and earn money from them immediately or in the future.

Loans for PLN 0 for new customers have become very popular, and companies will therefore probably continue offering such promotions for a long time. Interestingly, the promotion allows customers to borrow increasingly larger amounts completely free of charge— for payday loans, as much as PLN 5,000, and for installment loans, up to PLN 10,000 (an installment loan is free, however, only if it is repaid within 30 days).