What Does Interest Free Loans Mean?
Interest free loans are loans in which no interest needs to be paid. With interest free loans, only the original principal must be repaid to the lender.
Many people choose to get loan protection insurance to provide coverage in the event that they cannot make payments on their loans.
Insuranceopedia Explains Interest Free Loans
Even if a loan is interest free, the borrower must still make monthly payments of a set amount so that the loan is repaid in a reasonable amount of time. Borrowers, then, can still struggle to repay it if something happens to them. For example, if they or one of their dependents falls ill, or they or their partner loses their job, then it can be extremely difficult to make the payments owed on the principal. This can be especially true if the loan is a mortgage loan that is worth a lot of money and the monthly payments are very high. Loan protection insurance provides coverage for such situations.