Interest Free Loan UK

They say there's no such thing as a free lunch - but is there such a thing as an interest free loan?

Most so called "interest free loans" are in fact cashback loans. There are not many around these days although one company sold a lot of these loans about 10 years ago. The idea is that you pay the principle and interest back over a given period, say 5 years, and providing that you make all the payments on time and fulfill other requirements, you can apply to get the inteste returned to you.

These types of loan gained some degree of notariety whaen people fell foul of the requirements. However, if you made all your payments on time, read the small print carefully and met the other (not too onerous) requirements (such as applying for cashback within a certain number of days of the end of your loan and doing so by registered post to the correct address) then like many happy customers a cheque would arrive in the post for the sum of all the interest you had paid.

It alsomost sounds like a loan that is too good to be true!

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