One option is a personal loan. In this case, not only the interest is dropped, but there is also no private lender request or proof of income. Nevertheless, this type of loan should also be carefully considered, because it does not appear to be the optimal solution in every situation.
A personal loan is especially free of interest if a close friend or relative can be won as a lender. However, this requires a lot of trusts and the relationship can be severely stressed by the economic component. By not paying interest, debtors are often able to repay the money in full much faster, since only the installments have to be paid. This can be more important for private individuals than a possible profit through interest. But even if a lender has been found with whom the debtor has a close relationship, it is important to contractually stipulate all the terms of the relationship.
At least there can be discrepancies and then it is better if the parties involved can refer to a legally valid contract. In this way, the debtor is less dependent. Without a contract, he would always have to live with the fear that the creditor would suddenly demand all of his money back. The creditor, on the other hand, gets significantly more certainty that he will actually get his money back by the stated time. A contract also protects the relationship with one another despite possible differences of opinion. Personal loans are also very popular because of their flexibility. The demands can be individually adjusted among friends. The creditor usually knows the financial and economic situation of the borrower and can react to current developments in it.
Zero financings, which is used especially in the automotive and electronics sectors, is a loan without interest. Goods can be bought and are then paid off in installments. There is no interest. For retailers, this is a popular marketing measure with which many customers can be won. Customers, on the other hand, benefit from being able to spread their financial obligations over a longer period of time. Of course, this zero-funding can also have disadvantages. So users do not have to pay interest, but that does not mean that there are no other fees, for example for processing.
These are often hidden in the small print and can mean high costs. In addition, the terms of zero financing are always very short, making the rates quite high. This means that consumers can quickly overwhelm themselves financially. If the zero financings then have to be replaced by a normal loan, this is associated with very bad conditions and a very high-interest rate has to be paid. In addition, customers who use zero financings are often excluded from other discount campaigns.
This can be a considerable loss, especially in the automotive industry, where cash payers get discounts of up to 25%. With the high sums that are normally paid for a car, a regular loan from your own bank is quickly worthwhile. In addition, zero funding is often a fixed offer. In doing so, users often have far fewer options for choosing details and adapting their products individually. This can be a significant disadvantage when purchasing used items. Zero financings can be good business, but especially with large purchases, you should compare exactly whether a regular loan is not cheaper and risk-free, because zero financings are often just a cheap advertising medium that actually does not benefit the consumer. Whether this financing is worthwhile must always be decided on a case-by-case basis.
Interest-free loans from the state or local authorities
There are also loans that are granted interest-free in order to promote certain groups. The well-known, which students can apply for, is an interest-free loan. However, this is associated with special requirements and therefore those affected should inform themselves exactly about it. Many municipalities want to attract certain groups of the population with interest-free loans. For example, they grant interest-free loans to young families or certain companies in order to gain or maintain them as taxpayers and residents.
These offers are usually very advantageous for users and can often be used without hesitation. However, such actions are usually associated with significant restrictions or demands, so borrowers should not be too hasty here either. An interest-free loan should also not hide the fact that it still has to be repaid. Otherwise, this practice can also quickly become a debt trap.
There are usually no interest-free loans at reputable banks, and yet there are many offers of this type on the Internet. However, these are often empty promises and these offers should not be used. Often consumers should only be made to pass on sensitive data. These are then used. In other cases, users are urged to buy other services. These are then also associated with empty promises and the consumers face high costs.