Large purchases like furnaces, appliances, and even some furniture can come with deals that offer no interest on payments for as long as a year.
However, if payments aren’t made by a certain date, major interest charges can be laid.
One Ontario woman says she was shocked when she missed her final payment by a week and got charged more than $3,000 in interest.
“It was a ‘don’t pay interest for one year,’ and I thought great, so I got it,” Nina Stancevski, of Bradford, told CTV News Toronto.
Stancevski said she had seen an advertisement for a water softener and decided to get one for her home. The purchase price was $6,500 and last August she agreed to a deferred zero per cent interest loan for 12 months with a finance company.
“In August, I had my last payment, in my head it was due for $804, and I didn’t get a statement,” she said.
Stancevski said she found out the final payment was due on August 15th, but she had made it a week later on August 22nd.
Because she missed the payment deadline by a week, she said she was charged $3,008 in interest.
“I didn’t get the final statement, so I didn’t know when it was due. But in my head I knew it was due by the end of August and I did pay it,” Stancevski explained.
Stancevski took out the loan with Flexiti Financial, a company that offers financing and payment plans for many different stores and services.
When she complained, she told CTV News the company offered her a discount of $900 which she declined, claiming she wasn’t properly notified of her final due date.
“I would like this to be forgiven. There has got to be some kind of grace period. I mean, I paid it on August 22nd.”
CTV News reached out to Flexiti on Stancevski’s behalf, but did not get a response. However, on the company’s website it does say, “With deferred plans, the balance must be paid in full before the end of the term to avoid accrued interest being charged to your account.”
“They (interest deferral plans) can be effective if the consumer is disciplined and can actually pay them off on time,” said retail analyst Bruce Winder.
According to Winder, anyone using deferred payment plans must keep track of them carefully and pay them off before their due date to avoid interest charges.
“If you’re going to enter one of these plans make sure you have a very disciplined process at home where you pay on time, you make sure you have proof it’s paid, and print it off,” he said. “You don’t want to be looking at a 30 per cent interest rate on anything.”
Stancevski told CTV News she feels she shouldn’t have to pay $3,008 in interest charges for being one week late.
“Just so you know, I’m not paying this. Write it off now or write it off later. I’m not paying it and I’m not going to pay it,” she said.
