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Interest Free Loan

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Interest Free Loan

What is a Interest Free Loan?

In the simplest form, an interest free loan is a way of borrowing money and repaying it without having to pay any interest on the principal amount. The borrower is required to pay back a minimum amount as Equal Monthly Installments as per the date on the statement. There are three main types of Interest Free Loans, though in many cases the lenders do not tag them as loans. These include: interest free overdraft, credit purchases at 0% interest and interest free balance transfers credit card.

Some Tips and Tricks

People often get confused between Interest Free Loans and Debt Free Money. The basic difference between the two is that, Debt Free Money can only be spent once and for all, while an Interest Free Loan as many times as it can be paid back. This would mean that Interest Free Loan is a more flexible option than Debt Free money.

Hidden Terms and Conditions

These Interest Free Loans are useful for a comparatively shorter period, hence making it a short term borrowing solution. Also, one should be careful about the hidden terms and conditions before getting an Interest Free Loan. If you are planning for a relatively longer lasting borrowing solution then you can consider other options like low rate credit cards.

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2 COMMENTS

  1. The interest free loans are very attractive, but often only given in small amounts over a small tenure. They are not a big profit maker for banks, so not very attractive to them for the means of making profits.
    Interest free loans are useful if you need liquid assets for a particular cause while you are liquefying other assets to pay back the principle amount.

  2. Interest free loans are basically what credit card companies offer. They usually offer the option to pay back the amount within a certain period of time without incurring any interest. This is really beneficial for a short term borrowing, where you are sure of making the payment of the complete amount within a short span of time. This article helped understand the difference between Interest Free Loan and Debt Free Money.

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