If you are looking for free credit, you can find it in stores to finance purchases during the promotion period. Apart from this possibility, free credit does not exist. If you want a cheap credit to finance the purchase of a car, works or simply for a need of money, you will find it thanks to our comparison tool.
Free credit: is it possible?
Free credit as the name suggests is a loan offered to customers with an interest rate of 0%. This is why it is often designated as a 0% APR rate credit. It is only offered during a purchase, and it is the law that wants that. Free credit could not be offered directly by a large financial institution under penalty of falling under the regime of sale at a loss, which is prohibited. However, it is the cheapest credit possible, since the interest is zero.
If you see advertisements blossoming on free consumer credit and credit at 0% rate more exactly, it is because this credit is offered to you by a merchant who took the interest in his charge. This is the only way to offer free credit legally.
And finally on the points of law on free credit, you should not see advertising on free credit, because the law recommended using the designation credit at 0% rate and not free credit. The latter is not free for the merchant.
But beware, most free credits are offered through a store card backed by revolving credit. And revolving credit outside of promotional periods can cost you dearly. The revolving credit rate is generally around 20% revisable APR.
Where to find the cheapest credit?
If you simply want to access a cheap loan, whether for a car loan, a work loan or a personal loan, you can use our exclusive comparator:
Our exclusive service will not only offer you the ranking of the best rates, but it will also increase the chances of actually obtaining cheap online credit at the best APR rate.
Indeed, you will get a non-binding assessment of the credit organizations offering the lowest rate. This helps to know if the latter is not just trying to bring all the customers to him just to take only the very best.
Thanks to our system, you will not get free credit but you will increase your chances of actually obtaining the best rate for your individualized file.
Free credit less than 3 months
There are other forms of free credit that are not legally consumer credit, however. The duration of a free credit is generally short, less than 3 months which is a legal threshold. In this case, we are talking about 3 times free of charge or 4 times free of charge.
Free credit has a positive image and is considered more as a payment facility rather than a credit. However, if its repayment duration is more than 3 months, free credit is part of the range of consumer credits and is therefore governed by the same legislation and involves the same obligations. In particular, you will have to sign a prior credit offer and benefit from a 14-day right of withdrawal.
Note that the price of the purchased good will not be increased if you benefit from a free credit. On the other hand, if you buy an item offered in free credit for cash, you will be entitled to a reduction so do not hesitate to ask for it.
Why does the merchant offer free credit?
The free credit facilitates the passage to the act of purchase for the customer and thus increases the turnover of the merchant. It’s win-win. This is why department stores and certain automobile brands regularly offer this type of free store credit. They can also promote it outside the point of sale by respecting the same communication rules as for consumer credit.
As such, communication on the term “free credit” is no longer authorized or therefore no longer authorized as such. Rather, you will see a 0% APR credit communication.
Indeed, free credit does not exist as such since it is in fact the credit organization or the merchant who takes the interest at his expense. It is therefore the rate charged to the client which is 0%. As such, the law also framed the communication on the APR rate, for what concerns us, we will speak of APR 0% or fixed APR 0%.
Benefits and Risks of Free Credit
Free credit over 3 months is part of consumer credit. Its main advantage is that the interest rate is 0%, that is to say that in practice you will not pay any interest on the credit. Conversely, you will have the obligation to repay the monthly payments of your free credit and these monthly payments could prove to be high if the repayment duration is short.
If you wish to have lower monthly payments which do not penalize your monthly budget too much, you will have to resort to a credit with a longer repayment term. In this case, it will no longer be a free credit. Finally, note that you must be wary and avoid accumulating several free credits, otherwise your debt level will explode.