Does a bank give a loan without interest or is that only possible through a personal loan offered within the family or circle of friends? The options on the financial market are many, so today you can find a small loan without interest without a long search. But with all offers without interest you should read very carefully in the fine print and look for additional costs.
This applies not only to a loan without interest, but also to 0% financing. Contrary to their reputation, the 0% loan without interest is in many cases expensive and non-transparent. In practice, financing methods with a favorable interest rate have proven to be a better alternative and are, on balance, more favorable than an offer that is advertised without interest and is, in effect, a loan without interest, but not a loan without additional costs.
FAQ about the loan without interest
Credit without interest: how is it possible?
There is definitely a loan without interest, although the lender seems to finance nothing in it. First of all, an alleged loan without interest must be carefully examined for hidden additional costs. If the loan is really interest-free, it is because this is good advertising for the lending company. Many borrowers are lured by the offer. Not for everyone this loan is the right offer, but once there, customers often close another loan there as well.
0% financing vs. Loan without interest
In the past, it was said that you can only afford what is paid from your own cash in your pocket. Today things are different and financing is booming. In itself, this variety of options is not a problem, but an advantage for the consumer.
This is important
Before you think about financing or a loan without interest, you should find out what additional costs arise or why a bank gives the loan without interest. With loans without interest, it is important to be particularly attentive. But are there loans without interest actually.
In general, increased attention should be paid to offers without interest, unless it is a personal loan. Nevertheless, you should know that the real credit without interest actually exists. Especially in the case of the small loan, which is granted without interest with a term of one to three months, you can find various reputable offers and look at them in comparison. If you include the incidental costs in the loan without interest in the comparison, you can not make a mistake and decide really cheap – without interest and additional fee.
The risks of 0% financing
The 0% financing meets you in all shopping centers, in the Internet, with the car dealer and in many further industries. It sounds tempting, but it is worth looking at the alternatives without interest or with a favorable interest rate. With 0% financing, consumer rights are limited and you look for transparency in most cases in vain.
Attention!
Check how long the interest rate is fixed without interest and at what point you have to expect higher rates due to expensive follow-up financing. Financing with 0% is built on this principle. They convince at the beginning with supposedly favorable conditions without interest, but after the 0% period they quickly become expensive.
The 0% credit without interest is often used in combination with a product purchase. Therefore, check whether the offer that you want to finance with a loan without interest is not much more expensive than in the portfolio of competitors. Because a higher base price is used by retailers to compensate for the shortfall in financing without interest. Another risk is based on the problem with return. If you want to reverse the purchase that you financed without interest, you usually have to reckon with a default compensation of 1%.
Attention!
The 0% financing is often accompanied by a product purchase. The bank's claim to repayment of the installments remains, even if you return the product to the dealer. Therefore, it is not even certain that you can get out of the contract for a loan without interest and stop paying the installments. This is because 0% financing involves two contracts: The purchase agreement and the credit agreement. With revocation and complaint of the product the credit agreement does not stop automatically also.
Serious or risky – the new trend: credit with negative interest rate
In addition to 0% financing, a new trend is making headlines. You can apply not only for a loan without interest, but even a loan with negative interest rates. If you are already wondering why a bank gives a loan without interest, you should be even more vigilant about financing with negative interest rates.
Finally, this option means that you borrow more money than you pay off in the end. With the credit without interest and with the credit with negative interest often additional products are coupled to the contract. In concrete terms, this means that in order to obtain financing with negative or no interest, you must, for example, take out an expensive insurance policy or apply for a credit card.
Exceptions exist only for the small loan, which is granted without interest, for example, for sums of 100 to 500 euros and is not linked to an additional contract conclusion.