A Quick Accessible Guide to 0% Interest Loans

As the name suggests, zero interest loans do not require you to pay interest. You are only required to repay the principal amount. Zero interest loans are seemingly appealing, causing hordes of applicants to apply for them. However, these loans come with certain terms and conditions. If you are an applicant and have a credit score that is well above average, you can expect to get approved for zero interest loans. Different Credit Reference Agencies (CRA) have different credit score ranges, but a credit score of 720 or more is ideal. 

You must keep in mind that you are subject to specific terms and conditions that come with zero interest loans. Violating these terms and conditions can make you liable to substantial penalties. 


Furthermore, you cannot afford to default on your payments and make payments past their deadlines. Doing this is a sure-fire way to damage your credit score, credit report, and hinder your ability to get approved for other loans that you may want to apply for in the future. If you are new to zero interest loans and want a gist of the fundamentals, this article is for you. 

Are you eligible for a 0% Loan?

Here’s where you find out if you qualify for a 0% loan. Be sure to meet the following conditions: 

  • Apply if you are above the age of 25
  • You must be a resident of the UK
  • You are required to have a credit score that is ideally well above 720
  • You must have a steady source of income. 
  • You must show additional documentation if you happen to be self-employed.
  • Your net income must meet the lender’s requirement. The lender typically asks for the latest salary slip. Your salary must be at least equal to the minimum salary needed to avail the 0% loan approval. 
  • You should not have any cheque return history over the last six months

When are you allowed to apply for a 0% loan?

Once you submit all the necessary documents, you can expect the 0% loans to get approved in 48 hours. 

If you’ve applied for a larger loan amount that companies and businesses usually go for, it will take more time. This happens because of the detailed documentation analysis, which requires more time for processing. 

If you haven’t submitted the necessary documents, lenders have the option to not approve your 0% loan. You will need to determine which documents you need to ensure the loan approval takes place. When you apply for the 0% loan, ask yourself the following: 

Do you need to borrow?

Ideally, it is better not to borrow a loan unless absolutely necessary. Ask yourself if you really need a loan. 

Do you need this loan for a planned purchase? 

If you have a planned purchase that you want to finance, getting a loan makes sense. 

Can you afford it?

Make it a point to borrow loans that you can afford to repay. Borrowing loans that you cannot repay is futile. If you fail to make loan repayments on time, you will have to pay a lot more in interest and will end up with a low credit score. 

Can you repay it in time?

If you are unable to repay your loan in time, you will be subject to a stiff penalty. You could consider looking up loans for poor credit if this is a concern and you do not have a solid credit score. 

What are the associated charges of 0% loans?

While 0% loans seem ideal, they tend to have a slew of associated charges. For example, if you happen to skip a loan repayment, the credit goes back to a standard loan. The interest associated with 0% loan which was initially waived off, will now be added to your loan. 

Besides this, you will most likely have to pay a transaction fee when you send money from a regular credit card to a zero-interest credit card. In the UK, this tends to be a significant issue for customers who regularly transfer small amounts from one account to another.

Where can you get 0% loans?

If you didn’t know 0% loans are accessible. You can avail them from a variety of sources, including: 

Electronics and Furniture retailers

You may want to purchase a new TV or a sofa. The retailers may offer you some great deals on 0% loans, which works very well for both the retailers and customers. Be sure to make timely repayments to avoid problems. 

Car Dealers

Car dealers happen to be another source of 0% loans. Car dealers generally offer you a 0% loan once you purchase a new car. However, you need to have an above-average credit score. You usually get these offers during promotion periods. The loan, however, is not totally interest-free. You will only most likely be exempt from interest during a specific period.

Medical Providers

Some medical providers also follow this scheme, which is why you can expect some banks to offer you 0% loans on medical care.


This is a quick guide to 0% loans that a novice can sift through to get an idea of the basics. 0% loans may sound ideal but are not always the best way to go. They usually come with associated charges. Be sure to check the terms of conditions of each loan and ask yourself if it is a feasible option.