What is the Eligibility for Interest Free Loan?
Remember, loan companies offer zero interest loans for limited periods only, within which you must grab the deal. To qualify for a loan without interest, you must fulfil a few requirements, including the following:
Minimum and maximum age requirements as specified by the lender
Indian citizenship
Minimum monthly income requirement
A stable job and ample work experience
A decent credit score
High repayment capacity
What are the Advantages of a Loan without Interest?
No interest loans give you more liberty and money in your pockets to cover your daily expenses. Some of the biggest advantages of these loans include the ability to make the desired purchase instantly. For instance, if you want to buy an expensive latest smartphone but don't have the cash to buy it immediately. In that case, you can instantly apply for an interest free loan and get the funds to meet your urgent requirement.
Instant approval is another big advantage that comes with a no interest loan. Rather than waiting days to get approval, instant approval is an obvious advantage, especially when you need urgent funds for emergencies. If you fulfil the lender's eligibility criteria, provide the required documents and get your funds instantly.
If you use the borrowed loan properly and repay its EMIs on time, it can assist you in efficient financial management and help you save money. For instance, if you wish to grab a discount offer on a foreign vacation, you can instantly cover the cost with an interest free Personal Loan and repay it in EMIs without paying any interest charges.
What are the Disadvantages of a Loan without Interest?
Instant funds availability without interest charges sounds good in the first instance. However, zero interest loans have significant risks associated with them. Most importantly, obtaining these loans requires a high credit score. Many lending institutions have a high credit rating requirement for no interest loan disbursal. Besides, these loans are usually restricted to certain types of products only, such as cars, mobile phones, travel plans, gadgets, appliances, etc. Finding an interest free loan on low-value purchases like groceries is unlikely.
Since these loans have hefty charges for missed EMIs and defaults, reading the fine print carefully becomes more important. These tiny letters will help you discover hidden fees and charges applicable in certain circ*mstances so that you can avoid them. The inability to repay the loan EMIs will add to the overall financial stress and affect the credit score negatively.
Taking up a loan without interest is beneficial, as you can purchase anything at its original cost without exhausting your savings. It may encourage you to borrow more than you require, inculcating a habit of unnecessary borrowing and mismanaged credit. So, instead of grabbing any no interest loan offer coming your way, understand your loan requirement and borrow only when necessary for better financial management.
How Much Credit Score Do I Need to Avail Interest Free Loan?
The credit score is a crucial number that affects your eligibility for an interest free loan. Since the lending institution takes significant risks in lending you money without any interest charges, they would like to ensure high chances of timely repayment by checking your credit score. Most of them will set high limits to credit score requirements to lend such loans to creditworthy borrowers only. While the minimum credit score requirement may vary from 700 to 900, check your lender’s condition before applying for a loan without interest.
Conclusion
Zero interest loans are viable alternatives to other funding options, including different loan types with interest, high-interest credit cards, peer-to-peer borrowing, etc. Some government schemes also offer no interest loans to people who require funding for immediate or business needs. However, before applying for such a loan, carefully assess the requirements and affordability to ensure timely repayment and get the best from the offer.
Frequently Asked Questions
1. Can I get a loan with zero interest?
You may get an interest free loan after fulfilling the loan company’s eligibility requirements. Therefore, check their specific eligibility criteria and documentation requirements to determine your eligibility. Don't forget to check the additional charges you must pay to obtain free loans.
2. Which loan type has no interest?
Lending institutions offer different types of loans without interest, including home, car, business, and Personal Loans. You can look for an interest free loan according to your requirements and eligibility.
3. Which is the best loan with low interest?
While looking for the best loan with low interest, Hero FinCorp is the most trusted brand offering loans at reasonable interest rates not exceeding 25%.
4. Is student loan interest free?
Not all loans for students are interest free. However, certain government schemes may offer 0 interest loans to qualifying candidates. You may also seek an interest free Personal Loan to cover education costs.
Disclaimer:This article serves solely for informational purposes. Please note that Hero FinCorp does not offer interest-free loans or similar products.
