Money Management
August 2, 2022

Interest-free loans? Yes, it’s possible with Xare

Don't want to take a high-interest bank loan? Ask a friend to share the unused credit on his credit card.

With the pandemic receding, the sun should have come out to shine on the world economy. Instead, what we’ve been hearing for the past few months is that winter is coming. Not only have prices gone up for fuel, food, and a cup of our favorite tea – even loans have become expensive.

So, borrowing money from a bank to make a big purchase will burn a hole in your pocket. But you can always turn to your tribe of friends or family members.    

The idea of getting informal credit from your ‘money circle’ is as old as time itself and has been used for generations to lend outside the banking system – like the stokvels in South America, menages inScotland, and kitty funds in India – there are numerous examples of how communities come together to pool and share funds.

It’s easy to understand why borrowing from your social circle works better than formal credit:  

  • It works on trust so there’s no need for any KYC compliance
  • You don’t need to establish your creditworthiness in terms of your asset holdings or profit potential
  • Interest rates are often much lower
  • Informal loans can be tailored to fit the unique needs of the borrower, making them more affordable and flexible
  • They tend to have shorter repayment periods, so they are less of a financial burden

Historically, people have used cash to lend and borrow from friends or family. In the modern paradigm, it could mean handing out your credit cards to someone you trust. But Xare brings a seismic shift in the way credit is shared.

The Xare mobile app enables anyone to share access to their bank cards with a friend instantly and for free. The friend can then spend the Xare card to make a purchase. When someone shares his credit card on Xare, his friend gets access to the unused credit on your card with no interference from any middlemen or banking institutions.

For instance, if you want to buy an iPhone 13 but do not own a credit card or you’re shying away from an expensive bank loan, you could simply ask a friend to share his credit card on Xare. Since the two of you have a relationship of trust, you can easily work out the terms of repayment. While you get access to the unused credit on his card, he earns precious points when his card is utilized.

In short, if you want to buy something you like but the high cost of credit bothers you, ask a friend to Xare and delay the payment - not the purchase.

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