Interest-free loans sound like an offer that is almost impossible to refuse.
But do they exist?
If you live and work in Singapore, you will have a broad range of options to choose from when it comes to loans. There is a high diversity of banks and licensed money lenders, and they are all ready to offer you money if you fulfil their requirements. Still, getting back to our issue, is any of them able to offer you a loan solution free of interest rates? The truth is that there is no such scenarios. Although there are some versions, that have lower or preferential rates, or, the best case scenario, you get to waive the interest rates for a determined period.
But, if we consider that credit cards are loans, in a way, then you might just have an interest free solution. When it comes to credit cards, mostly created for shopping needs, many banks or moneylenders will offer a 0% interest installment plan. Also, you may also find credit cards that offer a determined period, in which you can return the spent funds on shopping, without paying interest rates. These periods usually differ from 30 days to 60 days, or even more, in which you can pay back the money you consumed by using the credit card. But usually, the sums available on these types of credits cards are not extremely large. Although they will be measured taking your monthly income into consideration, making sure that you can pay them back if you consume them.
Besides credit cards, you won’t find any other type of loan free of interest.
If banks gave everybody money, without earning something from the interest rates, they wouldn’t bare the name bank.
They would be called a benevolent institution. But, since banks are probably the richest institutions, we know that is not going to happen, especially if you plan on taking a larger sum.
Now, we talked earlier about having a waiver of interest, in the best case scenarios. Yes, there are banks that, out of the desire to attract more customers, they will offer the possibility of waiving the interest rate for a specified period. Usually, this period is 3 or 6 months. Thus, the client either enjoys the first 6 months paying a smaller rate, without the interest, or they have the option to choose when to benefit from this waiver, like in the months when they wish to go on vacation or is they face a financial difficulty. But the bank must have this type of program, in order for the client to benefit from an optional waiving plan.
So yes, banks will continue to take interest rates for all the loans they offer, ensuring that they will thrive in the future as well. And since sometimes we pay back double the sum we got, then we can imagine that they will do just fine, considering the sufficient number of loans they give every month.