0% Interest Loans

The idea of it being possible to get a 0% interest loan sounds too good to be true to a lot of people. There are, however, a few ways in which it is possible to borrow money without paying any interest at all. In this article, Cashfloat will investigate ways in which people can get credit at 0% interest.

If you’re looking for a personal loan or a short term loan that has no interest, you may struggle to find anything that matches that exact description. Loans like this almost always come with interest charges that start as soon as money is borrowed. There are, however, other ways to get your hands on money with 0% interest. In most cases, 0% interest loans come in different forms.

How do people get 0% interest credit?

In the UK, 0% interest credit offers usually come in the form of credit card accounts or they’re tied to the purchase of a particular product.

The most popular way people borrow money with 0% interest in the UK is with a credit card. When you get interest free financing with a credit card, it comes in one of two forms. The 0% rate will usually either be available on purchases or balance transfers. Balance transfer cards let you transfer money to another account at 0% interest. Purchase cards, on the other hand, let you make a purchase (or many purchases) at 0% interest. Some cards will let you do both.

Another popular way people get hold of 0% finance is with 0% in-store financing offers. This is something most people are familiar with and is when a store lends a customer money so they can make a purchase from them. The customer then pays what they owe over a set period of time. This allows them to purchase an expensive item they might not be able to afford.

We’ll look at both credit cards and in-store financing next!

0% interest balance transfer credit card

With a 0% interest balance transfer credit card, you can borrow money from a credit card account and transfer it to another account at 0% interest. You owe money to the credit card provider, but this debt will have no interest for a set period of time. The main condition is that, after that time elapses, interest is applied. There are often other conditions attached to these cards as well.

0% interest balance transfer credit cards are often used by people who run up a significant debt on another credit account. If, for example, you owe money on another credit card or a store finance card that charges a high interest rate, you can use a 0% interest balance transfer credit card to pay it off. You’ll still owe the same amount of money but at 0% interest.

Make sure you’re fully aware of what the conditions are for a 0% interest balance transfer credit card before you apply for one. Obviously, credit card providers exist to make a profit, and they still hope to make money with 0% interest credit cards. The conditions that come with these cards mean that people do often end up spending money to borrow with them.

There may be a set fee for making a transfer in the first place, and there could be stringent rules for when it comes to keeping up with payments. You might have to pay at least a monthly minimum towards your debt, for example. Failure to meet these minimum payments could mean you have to pay penalty charges or that the 0% interest rate is withdrawn.

Always make sure you read the small print with a 0% interest balance transfer credit card.

0% purchase credit cards

Lots of popular credit card providers provide 0% purchase credit cards. These are cards with which you can make purchases without paying any interest. Like with 0% interest balance transfer cards, the 0% interest on purchases only applies for a set period of time. As with purchase cards, there may also be various other conditions as well.

These cards are often used by people who need to make a big one-off purchase that they can’t afford to make themselves. Borrowing money on a 0% interest card allows them to make repayments in manageable amounts over a long period of time. Another advantage to making big purchases with one of these credit cards is that, under the Consumer Credit Act, there are also protections that apply to the purchase.

Just like with balance transfer cards, it’s important to read the small print when you sign up to a 0% interest purchase card. It’s also important to make a plan about how you’ll repay the money. Most importantly, it’s important to have a plan about how to pay off the full balance within the 0% interest period. This is because the interest charges that kick in at the end of the promotional offer could be high. There may be other conditions you need to meet as well in order to avoid making costly payments.

Some of the best 0% purchase credit cards

Bank How long is 0% for? Notes
Barclaycard Up to 21 months The longest 0% period purchase card we could find at the time of writing is the Barclaycard. Be aware that not everyone is eligible for the 21 month 0% interest offer. Apply with Barclaycard
M&S Bank 18 months Everyone who’s accepted for this M&S card will get the 18 month interest free period. As well as that, you get M&S points when you spend with this card. Apply with M&S
Natwest Card 17 months You get 17 months interest free credit on purchases with the Natwest card. After that, there’s a 24.9% representative APR. Apply with Natwest

0% in-store finance for purchases

Lots of companies that sell expensive items, like sofas or personal electronics, will offer 0% interest in-store financing with the sale of certain products. Usually, they do this in partnership with a bank or another financial institution. Instead of paying in cash or handing over a credit or debit card to make your purchase, you borrow money through the scheme the company has set up and then pay it back later.

With 0% interest offers like this, there will be no interest charges for a set period of time. Offers like this have become more popular in recent years. Next time you need to make a big purchase, you can look and see if an offer like this is available.

Again, it is very important to be careful when you borrow money this way. Make sure you understand what the conditions are before you take out in-store finance. Just like with 0% interest credit cards, in-store finance deals come with conditions.

Most 0% interest loans for purchases require minimum monthly repayments, and as we said earlier, the 0% interest free period will only exist for a limited amount of time. Not meeting certain conditions, like if you miss a payment, could lead to significant charges being made. You may also pay high interest rates after the interest free period.

Is 0% interest credit right for you?

As you can see, there are ways it’s possible to get credit at 0% interest. Credit cards can be used in the situations we’ve mentioned, and in-store financing can help you get hold of something you might not otherwise be able to afford.

As we’ve stressed throughout this article, though, the most important thing to do is to make sure you know what you’re signing up for. There are conditions attached to 0% interest credit deals, and you might have to pay big charges if you don’t meet these conditions. The interest free periods will usually only exist for a certain amount of time, and you’ll often have to make minimum monthly payments. There could be other things that catch you out as well.

Don’t forget to checkout Cashfloat’s payday loans! Our loans aren’t interest free, but we’ve got a high acceptance rate, we get money to people fast, and we can help you out in a financial emergency.


Is 0% interest credit available to everyone?

Most 0% interest personal finance products only offer the 0% interest rate during a promotional period. So you’ll only get the 0% rate if you settle the amount in full within a certain amount of time. Lots of these credit offers come with other conditions as well. It’s important to read your credit agreement carefully before you sign it.

Any missed payments or other blemishes on your account could result in things like the 0% interest rate being withdrawn or you having to pay fees or penalties.

Are there any pitfalls to be aware of with 0% interest credit?

Most 0% interest personal finance products only offer the 0% interest rate during a promotional period. Low interest may only be available for purchases if you settle the amount in full within a certain amount of time. For credit cards, the 0% interest is likely to only be available for a certain number of months after you apply for the card.

It’s also essential to make sure that you keep your account in good standing through the 0% interest promotion life. Any missed payments or other blemishes on your account during the promotional period could result in the 0% interest rate being withdrawn and you having to pay the standard rate of interest (which could be relatively high) for the rest of the 0% interest loan period.

How can I improve my chances of qualifying for a 0% interest loan?

If you don’t have a great credit rating and you’re finding it hard to get a 0% interest loan, it might be best to prioritise improving your credit rating. If you keep up with all your existing debt obligations and take other actions to demonstrate that you’re a responsible lender, your credit score will rise. Once you’ve improved your credit score, you’ll look like a safer bet to lenders, and they’ll be happier to give you money. It can take a while, and it can be frustrating to be denied a credit card, but your score will eventually improve and things will become easier.

If you would like a better idea of what your credit report says about you and what you can do to improve it, various free online services allow you to look at your credit report. If you really need to borrow money, you may also be able to find other sources of credit in the meantime. At Cashfloat, we’re a direct lender and we provide our payday loans to people with bad credit scores as well as people with good credit scores.

Representative example

Total amount of credit: £700
Duration of the agreement: 6 months
Repayment total: £1,179.05
Interest is Fixed at rate of 185.39% per year | Representative 611.74% APR
Installment 1
Installments 2 — 5
Installment 6