Most of them actually charge interest that can reach 25% APR
63% of loans designed to finance the payment of income tax or advance repayment are advertised with a Nominal Interest Rate (TIN) of 0%. However, the fees that all of them apply mean that the real interest that the consumer will have to pay will reach an Annual Equivalent Rate (APR) of up to 25%, according to an analysis prepared by Cream Credits.
The 2015 Income campaign began on April 6 and will last until June 30. Until then, taxpayers will submit a total of 19.7 million returns, of which 74% will obtain a negative result (with an average return of 740 dollars) and 21%, positive, which will require paying 1,866 dollars of half.
Face the payment of personal income tax or to dispose of the refund in advance
11 financial entities (22.5% of the total) have loans that finance this type of operations, although three of them did not want to provide detailed information.
“Of the eight banks that do provide information on their loans for the Income campaign, 63% of the total is sold at a rate of 0%. However, all of them apply commissions for carrying out this operation, at least, of 1%. This causes that, when calculating the real interest that the consumer will have to pay, this will trigger up to 25% APR, a figure that triples the average APR of consumer loans, ”explains the spokesperson for Personal Finance of Cream Credits, Steffany Gonzalo .
In general, the loans that make it possible to finance the IRPF payment charge an average interest of 2.18% TIN. However, most of them charge commissions (seven of the eight offers that have standardized information) and, in some cases, those commissions are subject to a minimum in dollars.
“With this scenario, a consumer who had to finance the average payment of 1,866 dollars for nine months that taxpayers with a positive declaration will have to make this year, would have to pay an APR of 6.78%, which means that they would end up reimbursing Bank 1,916.4 dollars -50.4 dollars more than the amount initially requested.
Of all these offers are commercialized with an interest of 0% TIN. However, all charge opening or management fees, ranging from 1% of Fine Bank’s product (with a minimum of 24 dollars) to 3% of Best Bank and Sanbuwan. The application of these added costs causes the real interest of these “interest-free” products to be between 3.16% APR and 7.61% APR.
With regard to loans to advance the return of personal income tax
These products charge an average interest of 2.04% TIN. However, many of them (six of the eight offers) apply commissions that, in several cases have a minimum in dollars. “In this context, a consumer who would like to advance the return of the Treasury (740 dollars on average) to nine months, would have to pay an APR of 9.41%. That is to say, it should pay the bank 766.52 dollars -26.52 dollars more than the amount that the Treasury will enter- ”, says Gonzalo.
Among all these proposals, there are five that are commercialized with an interest of 0% TIN. However, all of them charge an opening or management commission, a charge that ranges between 1% of Fine Bank and 3.5% of Fine. Taking into account these added expenses, the real interest of these products ranges between 4.98% APR and 25.3% APR.
Loans for the payment or advancement of personal income tax can be very useful products
It’s because, unlike most consumer loans, they can request very small amounts of money and with a maximum repayment term that, on average, is around 11 months. However, it is very important to correctly calculate the APR they charge because the fees they apply are, in some cases, very high and that can cause the real interest paid by the consumer to end up shooting.