Why pay interest to borrow money when it isn’t necessary? Consumers who are willing to search round for the best financial deals can easily access short term deals, of typically less than 18 months, which allow them to borrow money without paying interest. As with most things financial it helps if ones credit standing is in good order to take advantage of the cheapest methods of borrowing. Forget about asking relatives or friends for loans, and make use of zero per cent borrowing from institutions.
Certain foundations and organizations offer interest free loans. One such example is the Jewish Free Loan Association. Another is the Bill Raskob Foundation which offers a number of interest free student loans. Some states also give interest free student loans to eligible students. It is worth checking out organizations which consumers are affiliated with or which offer loans on a charitable basis.
The most obvious way to borrow money without interest is to apply for a zero percent rate credit card. These allow consumers to take an interest free loan for the term of the introductory offer, which may be up to 18 months. Monthly minimum payments must be made on time for the duration of the interest free ‘loan’, but providing the amount borrowed is repaid in full prior to variable interest rate becoming effective such cards offer money clear and free of interest.
All credit card usage involves borrowed money though, and provided a balance is never carried past the due date all borrowing is interest free. Grace periods vary between providers, with UK banks being typically more generous with the time allowed on grace periods than their US counterparts. A 56 day grace period is common on many UK credit cards. Only the imposition of an annual fee or monthly service charge prevents credit card borrowing being interest free if they are utilized responsibly.
In a similar way current accounts can be used to obtain interest free overdrafts, though it may involve changing banks and opening a checking account at a bank with this service. Santander bank is a good choice for UK customers looking for an interest free overdraft.
Even the much maligned pay day loan companies can be used for interest free loans, though these are short term, typically repayable within one month. Pay day loans with no interest charges or fees are available as initial offers to new customers, and are very convenient for occasional usage. They can be a useful way of obtaining a short term loan with no credit check required, and are instantly accessible provided the application criteria is met.
The range of possibilities to borrow money without paying interest is wide, but primarily suited to short term borrowing rather than long term.