Bajaj Capital just offered me a Rs 15 lakh loan on 0% interest rate. That’s right, you read it correct. 0%.
Is there a catch? Of course there is. Do I know what the catch is. Of course not, I don’t know.
I don’t know how these schemes work. And they way the agents sell the plans its just impossible for a naysayer like me to read between the lines.
Anyway, so here is the deal the agent tried to sell me on the phone:
For example if I go ahead with a Rs 5 lakh loan with 10 year repayment I will be paying Rs 50,000 every year.
Bajaj Capital will invest the loan repayment EMI in a life insurance policy which will have a maturity of Rs 9.60 lakh (This is where the locha is). This entire money will go to the company.
Since Bajaj will get Rs 9.60 lakh at the end of the maturity they don’t need to charge me any interest rate. Hence, I get the loan at 0% interest rate and Bajaj still makes its money on the life insurance policy.
Now I want someone to explain how this works and what is the catch.
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A Day In My Life. 
Makes no sense. Why does Bajaj need to give you 5 lakh and then take you repayment to feed into an insurance policy? Even if what they say is true, what they will get is a 6.7% return annualized. They can put their money in a bank fd instead.
No, obviously there is a catch, and you will find out only after you decide to take the loan and ask for the loan papers, in which the catch will be disguised in some fine print.
I’m fairly sure this is a trick to sell you life insurance instead.