It almost sounds too good to be true. But it is actually an opportunity to borrow money without interest. Competition in the loan market is fierce, and therefore many have started offering interest-free loans for a period of time. But one has to be careful when looking for an interest-free loan, because even though it is legally interest-free, it may well have a lot of hidden fees that still make it a pretty expensive loan.
The vast majority of interest-free loans have a set-up fee attached. That way, the provider makes sure to make some money on the loan, even if it is interest-free. Other interest-free loans have a monthly administration fee, which is charged along with the regular payment. It can quickly become a costly affair. Therefore, it is always a good idea to take a look at the loan’s APR, where you see the loan’s total annual expenses. This is also the number you need when comparing loans. If the APR is actually 0.0% you can be completely safe; then the loan is free.
L’easy mini-loans are interest-free and interest-free for 60 days. That doesn’t mean they have no fees; There is a setup fee of at least 800 USD. In return you can wait 2 months to start your installment. If you are financially pressured for a period of time, this may be the loan you need to take out. You choose the maturity yourself from 12-36 months and the creation fee is actually at the somewhat low end compared to other loans.
At many electronics or home appliances retailers, you may occasionally get interest-free loans. Occasionally also free of charge. Likewise, in most places there is a possibility of a grace period. On those loans, there is a lot of money to save. However, it assumes that you spend the money with the dealer. So it’s a good scam if you still have to borrow money for a playstation or dryer. Then you might as well get rid of the expensive quick loans and take the loan from Octagen or Monoa.
Interest-free and fee-free loans are short-term
Vivus.dk has an offer where the first loan is 100% interest free and fee free. These are the kind of loans you should look for if it is to be as cheap as possible. The loan assumes that you pay back within the agreed time, which in this case is 30 days. You can max. borrow 4000 kr.
“What do they get out of it?”, One might be tempted to ask themselves. The answer is simple: they get a new customer. The customer may want to borrow again and return to Viloan when it went painless the first time. Maybe the customer will even recommend them to others. Word-of-mouth advertising is the most credible of its kind, so it’s definitely a good investment for them. Even if they do not immediately make money from it.
There are two reasons why small loans are repayable within a short period; it is less risky and they have the option of throwing some ugly interest on top if you do not repay within the short deadline. That way, they still make money on some of these “free” loans.