At Zillidy our goal is to help clients replace credit harming credit card debt and expensive alternative finance options.
We take our responsibility to offer fair, reasonable and transparent pricing to our clients very seriously. Your perspective on whether a Zillidy loan is cheap or expensive depends entirely on your perspective of the value Zillidy offers. For that reason, we want to be entirely transparent about our rates, fees and rationale for our interest rate pricing decision.
What is the total loan cost?
Interest rate: 2.99% per month for the first 12 consecutive months (35.9% APR), 1.5% per month for each additional month (18.0% APR).
Pre-payment fee: Waived for loans over 6 months.
Application fee: Zero.
Renewal fee: Zero.
Shipping fee: Waived for loans over 6 months.
Why is a Zillidy loan more expensive in the first year?
A Zillidy loan is different than a mortgage, a bank loan, a car loan or a credit card loan. We do not take a personal guarantee and there is no impact on a client’s credit. A Zillidy client has the right to walk away from their loan obligation at any time with absolutely no repercussions. There is a cost to Zillidy to provide this flexibility and therefore a price to the client to receive this flexibility.
Zillidy can be used as a short term bridge or as a longer term option. With no minimum loan period and no prepayment penalty, Zillidy provides that flexibility.
Consider this analogy:
You can rent a studio apartment in Manhattan for approximately $2,500/month (put aside for a second the added costs of first and last month rent, utilities, insurance, etc.).
If the hotel room nightly rate was calculated as a monthly rate, it would be $9,000 plus taxes and fees.
Clearly, renting an apartment for $2,500/month is a much better economic decision than spending the equivalent of $9,000/month on a hotel, right?
When considering the cost of a short term loan, using the annualized interest rate to calculate the cost is like pricing a weekend in New York based on the cost to rent an apartment for a month.
For longer term loans, we believe it is entirely fair to focus on the annual interest rate. This is why, once a client has made a commitment to Zillidy for more than 12 months, we can make a similar commitment to our client and very quickly reduce the loan cost to them.
Our goal is to help our clients achieve their financial goals. Use a Zillidy loan whenever you need it and repay it when you don’t, like you would a home equity line of credit, or make Zillidy part of your permanent financing structure and reap the benefits of lower average annual rates that continue to decline the longer the loan is outstanding.
How does the loan cost compare to credit card rates?
As the graph below demonstrates, the longer a Zillidy personal asset loan is outstanding, the cheaper it becomes relative to credit cards, with the added benefit of not using any debt capacity, impacting credit scores or preventing a Zillidy client from exploring additional financing options.