Asking for a Friend - If a company offers 0% financing, should I take that deal?

January 17, 2022

Q. If a company offers 0% financing, should I take that deal?

A. It depends.  Just because something is zero % interest, doesn’t mean it is worth it.   

  • When I see a deal like this, I often ask if I can purchase something cheaper if I pay up front versus financing the item; sometimes the answer is yes, and I walk away feeling like I got a better deal.

  • If the answer is no, then I take the cash I would have spent on that item and I invest it either in my emergency fund or my brokerage account and try to make the payment out of cash flow. That way if I ever need to pay it off quicker, I have the cash to do it.

  • Make sure you look at the fine print on this, if you accidentally miss a payment or go one day beyond the payment period, they may assess the interest all the way back to the original loan amount, not just what’s left.

Do your friends ask you financial questions? Pass those questions on to us at AskRPG@rootedpg.com and we will feature them in our future newsletters and post them here.