06/17/13

How to Get an Interest Free Loan

There’s no such thing as free money, right? Well, in some circumstances, there really is – an interest free loan is simply a loan that you don’t need to pay any money to receive. You get money, and all you need to pay back is the loan itself. Interest free loans are usually fairly difficult to secure, particularly if you have poor credit. But if you can secure an interest free deal, they have the potential to help you pay off your existing debts – which will save you money in the long term. We should mention that the interest free deals below aren’t strictly loans – but they are most definitely interest free!

An Interest Free Overdraft

An interest free overdraft is basically an extension of credit on your existing current account. For example, if you pay in $2000 per month to your bank account, an overdraft would extend the money available to spend on that account up from $2000, anywhere up to $7000, depending on your credit status. ┬áSome banks offer interest free overdrafts of up to $5000, while others will offer interest free overdrafts of less than $1000. Most interest free overdrafts will be completely free of fees for up to six months, so if you need a large amount of money fairly quickly, but you know that you’ll be able to pay it back within a set amount of time, an interest free overdraft could be for you. In some cases, you’ll have to pay account charges and it’s likely that you’ll have to pay fees for the overdraft if you don’t pay it back within a set period of time. You’ll also have to pay fees if you go over your agreed overdraft limit.

An Interest Free Credit Card

Although most credit cards charge interest, there are a number of credit cards out there that offer 0% interest on all new purchases. This means that you can spend money on your card, and as long as you pay the bill back in full by the agreed date, you won’t have to pay any interest. ┬áThe credit limit that you’ll have access to depends on your credit status and your history with the company, but you could get up to $5000. “Starter” cards will have a limit of around $500, and then that limit will increase as you prove that you can be a trusted borrower. Interest free periods can last up to 18 months, so this is a great way to get access to money over a prolonged period of time. If you’re looking to pay off existing debt, but you don’t want to pay interest on that debt, you might also want to consider a 0% balance transfer card. This allows you to pay off debts without having to fork out a fortune in interest payments. The only thing to keep in mind with a balance transfer card is that the 0% interest rate applies to the balance only – if you make new purchases, you risk losing that 0% interest rate.

If you’re trying to save money or pay money off of existing debts, be sure to limit your new spending – spending money on things you don’t need will only send you into a spiral of debt. Be very cautious and be sure to spend wisely, even if you are using a 0% interest free deal.