How to Get an Interest-Free Loan
In the perfect world we would never need to borrow money from banks or anyone else. Unfortunately, it’s not always possible to has a debt-free life. But it is possible to at least get some money and not pay any interest. I know, a lot of credit companies that promote “interest-free credit” are either scams or there is always some horrible small print, but it is possible to avoid paying interest. In fact, it’s really easy if you do it the right way. I’m going to show you three easy ways of getting interest-free money and thus cutting down your debt.
1. Interest-free Current Account Overdrafts
The first thing you should know about interest-free loans is that banks and credit companies don’t actually call them “loans”! Quite a few UK banks have current accounts that allow you to have 0% interest overdraft. The actual amount of interest-free overdraft varies from bank to bank, but the option is still there. Santander has two current account options that allow 0% interest overdraft (123 Current Account that allows you to earn cashbacks and Everyday Current Account), and Nationwide has an amazing FlexDirect account that allows you to have an interest-free overdraft for 12 months.
2. Use Your Credit Card Wisely
Another no-brainer way to get an interest-free loan is to use your existing credit card, but use it wisely. Most credit cards offer 0% interest on new purchases as long as you pay your bill within a certain period of time, before the bank starts charging interest. The amount of money you can spend interest-free varies and is usually indicated by your credit card provider. Right now there are credit cards that allow you interest-free loans for as long as 17 months (Halifax Purchase card, Tesco Clubcard Credit Card for Purchases, and more).
Just to give you an example, here is how I use my credit card interest-free and earn money at the same time.
- I use my credit card for all my purchases during a month. It’s a cashback card, so I get some money back as I go.
- While I’m using the bank’s money, my own money is earning interest in my current account
- When the time comes to pay my credit card bill, my salary arrives and I pay the bill in full
Result: interest-free money for my daily spending + cashbacks + current account interest = happy little me!
The only thing to watch out for is to NOT MISS the day after which the bank will start charging credit card interest. You will be very sorry if you do. So I suggest that you set your smartphone’s calendar to give you monthly reminders. My Android phone does it very well.
3. Get Interest-Free Loans from Shops
Some shops, especially the ones that sell household goods and electronics, often offer you to get a loan to buy that new fridge or whatever you’re buying. These loans can last up to 24 months, but a lot of them have an interest-free period of 6 months. Basically, buy your thing, pay nothing upfront, and then pay the loan in full within the 0% interest six-month period. That’s how I always buy expensive items.
Do you have your own tips for getting interest-free loans? Let us all know in the comments!