Interest-free loans mean that all new customers of a credit company may borrow a sum of money without having to pay any interest. Please note that in some cases there may be a setup fee and / or a charge, in these cases you will be informed of this when you apply for the loan on the credit company’s website.
Only sms loans without interest are offered, credit companies and banks with other forms of loans, such as private loans, always charge an interest rate.
About borrowing interest-free
Interest-free loans and free sms loans are loans that are offered to new customers for marketing purposes. The idea is that customers prefer to stay with a lender with whom they have already taken a first loan. They are therefore making sure to market this first loan to attract customers. Another way for sms companies to attract customers is by offering loans without registering with credit record. Since many borrowers do not want their applications to be included in credit record’s register, together with interest-free loans, very attractive offers are available.
This maturity is usually 30 days, but some loans can last as little as 14 days. Sometimes, however, the setup fee and / or management fee may apply, so it is not possible to say that interest-free loans are completely free, marketing that emphasizes loans that are free is thus misleading and should be taken with a pinch of salt .
Information on additional fees is always clearly presented on the page where you apply for your loan. The loans in question are almost always sms, fast loans and micro loans. That is, loans that are small enough to not hurt the lender if the loan is not paid. Below you will find a selection of the banks and credit companies that offer interest-free loans and sms loans.
Interest-free loans and sms loans without fees
Here at Lite Lending Credit we have gathered
- credit companies
We have gathered several lenders that offer you the opportunity to apply for interest-free loans directly online through an easy-to-understand application process. The offers we present are those that apply to new customers and that act as marketing by the lenders.
How do I borrow interest free?
Borrowing money without interest is no more complicated than taking a loan.
1. Choose from the offers above and choose the most suitable one.
2. Go to the application form on the lender’s website and submit your application
(check carefully that the loan will really run without interest and fees).
3. Most often you will receive a preliminary message directly on the screen if your loan application has been granted. Maximum waiting time is usually a banking day.
Are interest-free loans really free?
The quick answer is yes. The majority of lenders that offer you sms without interest do not charge any fees. However, there are some lenders who charge a set-up fee and possibly also a newspaper fee. Read the loan terms carefully before applying to avoid any negative surprises.
Let’s say you take out a loan of $ 1500 and receive $ 150 in fees. This gives a total cost of 10% of the loan amount. However, it is incorrect to say that 10% interest is the same as an interest-free loan with fees equal to 10% of the loan amount.
If you choose between interest and fees, you should always choose interest. For with interest, each year you can deduct about 30% of last year’s interest costs in your declaration.
There are many credit companies that operate in sms loans. The competition for customers is thus fierce and it is getting tougher every day.
One way for lenders to stand out from the crowd is to sharpen offers for new customers, and to offer interest-free loans and sms loans is fully in line with this idea. Of course, for you as a potential customer, this competition (and the effects it creates) is very advantageous.
Private loans and mortgages without interest
When it comes to larger loans such as private loans and mortgages, there are some lenders who offer loans with interest-free months. This is so that customers have the opportunity to get some extra money during certain months.
It could be Christmas or maybe a holiday month where you would rather spend your money on gifts and travel instead of interest. However, it is important to note that the lenders do not offer their customers the interest rate for those months, but the interest rate is instead postponed or distributed to the other months.
Which means you have to be ready to pay more interest during the paying months.
Risks with interest-free loans
It is difficult to say that interest-free loans have a direct disadvantage. Apart from some fees that you do not always know about, there is not really anything bad with this type of loan. The only problems you can have are those that you cause yourself because of your own carelessness and negligence.
The repayment period for an interest-free loan usually, as I said, is 30 or 14 days. This is very little for a loan and there is always the risk that you will not be able to repay the loan on time. If you fail to pay back in time, you will encounter several unpleasant fees, costs and probably the regular price of the loan.
Missing the repayment of the loan can further lead to payment remarks which makes it much more difficult for you to take out a loan in the future.
Important to remember
Just because it says that you can borrow money without interest does not mean that it is free of charge. Fees may be added, which may be more expensive than a regular interest rate.
If it is said that the loan is both interest-free and fee-free, it must by law not cost anything. However, there may be other requirements such as that the repayment should be made via direct debit.
Loans that have interest-free months expect you to pay those months’ costs at another stage of the loan
Be careful when you take out a loan and take only one loan that you are sure you will be able to repay. Interest-free and fee-free loans must also be repaid and late installments often entail fees and expensive costs.
Low interest or no interest?
As I said, there are similarities between interest-free loans with a fee and low-interest loans. Therefore, when applying for a loan, one should not lock in too much to find something completely without interest. Sometimes you can get a better deal with a low interest rate loan.
By applying for regular quick loans and private loans, you have the opportunity to apply for larger sums with longer repayment periods. As before, interest-free loans are a marketing ploy and this is something that works well on paper.
But if you cannot afford a loan with interest, you should not take a loan at all.