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Ways to borrow money without paying any interest.

Most people assume that when they take out a loan that they will have to pay back the amount of the loan plus interest on the money borrowed. In most cases this is true, but there are two sources of potential interest-free loans that could be a consideration for those looking for a loan with no interest. Read on to learn about why both should be approached with caution and which one is a better option for you.

The first source would be family and friends. Many people looking for money to borrow tend to turn to family or friends and most family members and good friends won't attach interest onto money borrowed. This might seem like an excellent idea, but keep in mind that money issues between family or friends can turn sour and you might end up tainting a relationship or friendship. The key to borrowing money from friends and family is to do so sparingly and with a written agreement.

If you decide to borrow from someone you know, make it clear that the person should not feel obligated to extend a loan and state clearly why you came to them and what you need the money for. Being up front and honest is crucial when asking for money from friends and family. If they agree, you'll need to approach the agreement in a business-like manner; writing up an agreement that dictates the amount, when you plan on paying it back, what it is for, and any other conditions that you and the other person may want to implement. The agreement should be signed and dated by both parties and you should make sure that you can make good on paying them back in a timely matter before even asking. Money issues between loved ones can get out of hand quickly, so carefully consider your situation before looking for a 'friendly' loan.

The other option, and perhaps more advisable option if you don't want to risk relationships or friendships, is to seek out a 0% credit card offer. Many times credit card issuers will extend 0% interest cards to new customers approved for the card. The time of the 'free' loan usually lasts from between 3 month to 15 months depending on what you are approved for.

0% credit cards are an excellent interest free loan option if what you need the money for can be purchased via credit card. Keep in mind cash advances are not usually covered under the 0% offer; and balance transfers may come with a transaction fee. The key to using a 0% card is to only use the amount on the credit line that you know you can pay back before the 0% offer ends. Taking on more of a balance on the card then you can handle, will lead to interest and fees down the line. Another key aspect of using 0% credit cards is to make sure you make the minimum monthly payments on time, every time even during the 0% promotional period.

You'll need a decent credit history and score to secure a 0% credit card and if you intend to borrow from family or friends you need to make sure it is worth the risk as well. To avoid conflict and personal troubles, trying for the 0% card first may be the best option before falling back on family or friends for your loan needs.

Learn more about this author, Maxwell Payne.
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