Do they teach about interest rates in math classes these days? We can’t recall learning about them during our tenures in high school. And let’s be honest. Is there a math-related concept of more value to our real lives than interest rates? Nearly all of us have aspired to purchase a home and a car in our lives. And, long before doing that, many of us went to post-secondary school with the help of student loans.
Learning about interest rates was something that many of us did as part of our life experiences.
Recently one of our colleagues engaged in a discussion with our team about the concept of interest rates and how late in life he felt he truly understood how they worked.
“I first learned about the whole concept of interest when I had to begin paying back my student loans,” he remembers, “I was shocked at how much of my monthly payments would go towards the interest I was accruing instead of my principal balance. It was crazy! I realized that if I only paid the minimum due each month, it would take years for me to pay it off in full. In fact, I’d only have just paid it off!”
Our colleague sparked our conversation about interest rates when he was reminded that 2018 was the projected year in which he would have paid his student loan off in full, had he stuck to making minimum payments. He graduated in 2003. “The crazy part is, all these years later, I’m still confused as to how banks determine what we owe them,” he said, “The math makes it so difficult to know how much you’ll have to pay over time.’
Is there a way people can avoid paying interest altogether?
For most car and home buyers, the answer is “no”. However, for Canadian business owners, Canadian POS Corporation offers a way that they can get their hands on much-needed financing for their businesses – without having to worry about interest rates! Instead of charging interest, we charge each of our clients a one-time fee.
As result, our unique merchant cash advance program provides the answer to the question “What will I owe you in full?” This is a question that can never really be answered by a loan officer at a bank. With interest rates, it’s difficult (actually, impossible) to know what the full and complete repayment of a loan will be before the loan is actually paid off.
With a merchant cash advance, clients are given the exact amount of their repayments before the money is even given to them. That way, they can make informed decisions as to whether or not taking the cash advance is the right move for them. As well, it gives them the peace of mind of knowing that no matter how long it takes for the advance to be repaid, they will never pay a penny more than the total amount of the advance and the one-time fee given to them on day one.