Yes, you did read that right. No, I’m not kidding or advertising any sort of product, company, or program. However, there seems to be a lot of hype surrounding the potential for up to a $40,000 loan with 0% interest from American Express right now (using your active duty SCRA benefits). Here’s how it works:
Step 1: Apply for a personal loan from American Express. These loans typically range from $3,500 to $40,000. Rates are usually as low as 6.98% as advertised by American Express. I was pre-approved for a $25,000 loan personally (below).
Step 2: Get approved for the loan and begin making payments. According to reports from individuals who have used this method to get a 0% interest loan, this does not work if you currently have a personal loan or business loan (it must be paid off in full). Additionally, this won’t work if its been fewer than 60 days since you applied for or were approved for a personal loan or business loan.
Step 3: Call American Express and Ask for SCRA (Service-member’s Civil Relief Act) benefits on the loan. People who have tried this have received mixed feedback from American Express customer service representatives. Some have called back multiple times and others have made it work after only a few phone calls. It is largely dependent on which customer service representative answers and their experience level. Individuals have received the interest rate reduction in 33-45 days.
Step 4: (or potentially step 1): Determine what to do with the money. There is no point in taking on debt for the sake of taking on debt. If you are approved for the $40,000 loan, your monthly payments for the next 36 months will be around $1,100. Using that money to pay off high interest credit card debt, for example, might be a good idea. It isn’t necessarily wise to take on debt for the sake of investing it, even if it is at 0% interest. Regardless, you should have a plan before applying for the loan and using it. Defaulting would be bad news for your credit score which is never good.
If anyone has success or is rejected in this process, please be sure to leave a comment below! $
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