(MP) Sometimes we all need a loan for whatever purpose. Hopefully, it’s for investing in a real estate deal. But in any event, you’ve found yourself a little short on cash.
If you don’t have enough in savings to pay for something out-of-pocket, you probably have to charge it to your credit card, which suggests paying interest on a loan. I want to show how to get an interest-free loan like the rich. Why should you go even deeper into debt — owing more on top of what you have already borrowed. It simply isn’t a good idea… Right? It’s time to think like the banks and work them to your advantage.
Banks, usually offer generous loan terms for wealthy customers that use a number of its services. In particular, they will drop an interest rate on a traditional mortgage or similar loan when a customer also uses its private wealth management services. But, what about you? Banks typically are not in the habit of giving the little guy or gal sweet deals! Well, reconsider – maybe they are: If you think like the rich and learn to work their systems to your advantage.
Here are a few interest-free loan techniques that the rich use every day and we got money…
Interest Free Loan Techniques
1. Borrow and earn money with a spread
Want to be wealthy than model yourself after the banks. That’s what my investors and I do. A bank’s business model is comparatively straightforward. Banks soak up deposits; pay interest rates to people who have deposited money into the bank’s CDs, checking or saving deposits. And after that lends that money out to consumers. They make loans for residential and commercial mortgages, to begin or expand businesses, or to finance buying an automobile. The one thing to understand here is that the banks pay a lower rate than it earns on these loans. You can do the same thing. If the spread can be determined with any level of confidence, it can mean effectively borrowing money for free and earning a return on the money borrowed. The way to earn a spread is to get a loan and keep the original borrow rate low. The best way to do that, besides having a lot of money, is to have a great credit score. This will allow you to get a low rate loan, put that money where it will earn a higher rate and pay it back with a profit. “Follow the Money” newsletter goes into this more thoroughly.
2. Overdraft Protection
Set up two or more checking accounts, with a good credit score the overdraft credit limit could go as high as $5,000 each. If your credit score is low read “Explore Credit Scores.” Now every few days you would write a check from one bank to the other covering the amount of the overdraft. By covering each withdrawal with another deposit, you will not be charged interest since it would take two or three days for the records to catch up. By that time you have made another deposit with covered the amount of the original loan. If you use the right banks, you can keep the money interest free for a long while.
3. 0% Balance transfer on credit cards
If you’re already paying interest on a debt, you could turn it into an interest-free loan by shifting it onto a credit card offering 0% on balance transfers. Balance transfer credit cards with 0% APR allow you to pay off your debt interest-free, as long as you can do so within an introductory period. After that, your rate (typically 15-20% APR) will increase — and any balance you still have will be subject to it.
4. The best travel credit card
Here’s the one credit card that gives you interest-free loans on advance loan checks: Chase VISA along with its related cards, such as the one we use through an airline – United Mileage Plus Visa. We have used it for years, and practically at least once a month. And Chase/United Airlines Visa sends us added “convenience” checks that allows us to pen a check to anyone, including myself, as much as $41,750 personally. Yours could be higher or lower. Customers rich and middle class have taken advantage of these interest-free loans for years. You just had to know about it.
Here are the perks:
a) Borrow cash instantly with no-hassle “convenience” checks where you write yourself a loan.
b) The loans are personal and unsecured. Unbelievable, but true.
c) Make use of the money for any purpose: Repay a high-interest credit card bill or a mortgage, or invest in real estate, stocks as well as other speculations. There is literally no restriction on the using of these no-interest funds.
d) The repayment schedule is incredibly flexible, enabling you to borrow interest-free for months. Re-pay as little as 5% a month.
In order to get these Visa checks, you just have to contact United Airlines, or Chase Bank, and join their credit card. Right away, you too will be getting offers to borrow money at very good rates. During the past, I’ve received offers for 2.99%, 0.99%, and 0%. Chase changes these offers month to month. Plus, there may be a few restrictions: The 0% APR promotional checks must be posted by a fixed date, and you may borrow interest-free for six to seven months. Afterward, normal interest rates apply. Or you can borrow at a 3.99% fixed APR for as long as you have an outstanding loan balance. (That’s more than the Fed gives commercial banks!)
Finally, there’s also “transaction fees” typically around 3%, however, the credit card company can’t charge more than $75. So it pays to borrow as much as possible on any given check. On a $12,000 loan, the $75 fee is less than 1% of the outstanding loan. That’s as close as you will undoubtedly get to an interest-free loan if you don’t pay back on time.
Word of caution
Before you use any one of the above interest-free methods be sure you commit to a practical repayment plan. If you can’t reasonably pay off your debt within the given period specified by your particular bank, none of the techniques found above are likely to save you money on interest.
P.s., another option you might want to explore is an article about Money Transfer Credit Cards at MoneySupermarket.com. I also highly recommend reading “How to Borrow Money at Zero Interest,” by Daniel K. Berman, PhD, It’s the bible of getting free money.