Q. Are the '0%' schemes offered by the dealers / financiers really 0%?
A. Yes, for customers it is indeed 0%, though for the financiers, it is not 0%. Dealers offer certain discount either by themselves or pass on to the financiers some monetary benefits that the manufacturers give them. The discount so received is factored in the pricing by the financiers. In effect, the financiers absorb such discounts and protect their minimum estimated return, while for the customers, it works out as 0%. Due to these reasons, '0%' schemes are offered only on specific products, quantum and for specified periods.
Q. In what way is the security deposit scheme beneficial to the customer?
A. Even in a Security Deposit Scheme, the yield to the financier would remain the same as that in case of other Schemes. Due to the security deposit, the finance charges are calculated at a relatively lower flat rate on the entire value, but, interest on the security deposit is paid to the customer compounded at agreed intervals.