deferred interest的意思|示意

Deferred interest is a form of financing offered by many credit card companies that allows borrowers to acquire an item or service now and pay interest-only payments for the initial period of the loan, usually 6 to 12 months. After the deferred interest period, the remaining balance of the loan is subject to the interest rate listed in the loan agreement.

This type of financing option is generally used for large purchases or products, such as furniture and appliances, from a store or online retailer. The major advantage of deferred interest financing is that borrowers can purchase items today and enjoy a low interest rate for the term of the loan.

When using deferred interest financing, it is important to read the loan agreement carefully. Many lenders will not begin charging interest until after the initial period, but if the loan is not paid in full before the end of the deferred interest period, interest will be charged retroactively on the entire loan. For example, if the loan is not paid off within 12 months of the agreement, interest will be charged on the entire loan balance from day one.

Most deferred interest financing agreements require borrowers to make regular payments and keep up with the payment schedule. If a borrower fails to make the required payments and the loan is not paid in full before the end of the promotional period, they will be responsible for paying the interest on the entire loan balance.

It is important to remember that deferred interest financing is meant to be a helpful tool for budget-minded borrowers, not a way to avoid paying interest on large purchases. If used responsibly and paid off timely, deferred interest financing can be a great way to manage large purchases without making a significant impact on the budget.