Is it a Good Deal or Good Marketing?
"No Interest" Loans Aren't Completely Costless
When a loan claims “no interest,” is it a good deal, or just good marketing?
Assistant Professor of Marketing Bowen Luo shares how 'no interest' loan advertisements may be misleading consumers on the latest episode of Bauer Business Focus.
Assistant Professor of Marketing Bowen Luo
Assistant Professor of Marketing Bowen Luo
"Cash‑advance apps often advertise loans as having “no interest," which drives downloads and makes people more likely to keep using the app. But buyer beware. These claims are misleading causing many users, even those who’ve borrowed before, to believe the loans are completely costless."
She added: "When people misunderstand the true cost, it distorts borrowing decisions and ultimately causes financial harm, raising questions about regulation in this rapidly growing market."
To hear the full segment, click here.
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