Eli5 ‘How do personal loan companies make money if you pay everything you loaned back,before the first installment date (and no early repayment fee either)?’
In: 6
It depends on the type of loan, but some make money of the retailer. For example credit cards make money at the point of sale. Some installment loans take a commission from the retailer.
Overall it’s very unlikely that a person would go through the trouble to take out a personal loan just to pay it all back before the first installment.
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