How to make an interest free loan?

The words “interest-free loan” may sound odd together, but it’s true: you can get credit without paying any interest. How? Discover everything in this article.

Although it does not involve the payment of interest, this financing is equal to all others. Therefore, you need to be prudent as you are with other financial products are not to run out of personal finances.


How to get an interest free loan?

How to get an interest free loan?

An interest-free loan allows the credit holder to repay the amount used without the MTIC increasing due to the interest payment. This facility is allowed through three different options.


1. Credit Cards

For one thing, you can use your credit card to access an interest-free loan.

All credit cards have a ceiling, which corresponds to the maximum amount the bank makes available to the customer to spend monthly. However, if the customer makes a certain purchase within that ceiling and decides to repay in full what he has spent over a period of 20 to 50 days (this period varies by financial institution), then he will not pay any interest – this is the so-called payment. up to 100%.

Note that most credit cards are pre-set to, after a certain time and on a specific date (ask your bank what their date is), remove from your current account the amount for purchases you have made. with the credit card.

If you wish to make the payment in several installments, you will need to give this indication to the bank – but note that you will be subject to the interest payment.

This way, by having a credit card, you can not only have access to an interest-free loan, as well as other advantages, such as discounts on a partner network, accumulating airline miles or even getting back a portion of your bank account. of the money you spent (a feature called cashback).


2. Loans Through Stores

Loans Through Stores

Imagine that your fridge is malfunctioning and cannot be fixed. The solution is to buy a new one and, as a rule, this appliance is expensive. You can use your credit card and pay the following month, but if this is too high for your personal finances, there is another option.

Many retailers offer the possibility of paying for a product in installments over several months without interest. Usually these stores make the loan on time (associated with a given financial institution), setting a certain deadline and immediately telling you what your monthly installment will be.

So, and considering the previous example, if your new fridge costs 900 dollars and pays in 12 months without interest, you will be paying 75 dollars a month without adding interest to this loan.


3. Loyalty Cards

Finally, another option for an interest-free loan is through loyalty cards, which are credit cards associated with a brand / store, which offer numerous advantages: from partner discounts to exclusive in-store promotions, as well as access to various forms of payment. . . . (such as payment in three, six or 12 months without interest, for example).


Factors to consider

interest rate

An interest-free loan should still be used sparingly. You can use this solution through your credit card every month, as long as you manage your personal finances well. Otherwise, it is ideal to choose to pay only some expenses with the amount available on your credit card.

When purchasing higher value goods, such as a refrigerator, for example, you should read the interest-free loan agreement carefully. Unfortunately, you may have to pay for processing, formalization or opening fees, and you may end up paying more than you expected.

In addition, an interest-free loan should not be used constantly, as monthly repayments start to accumulate and it can become difficult to manage your finances.