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Personal Loans

No-Interest Personal Loans

Borrowing money comes at a cost. Depending on the lender, you might need to pay application fees, origination fees, and late payment fees. You also must pay interest on the loan, which can be the most expensive part of borrowing money.

That makes the idea of no-interest personal loans appealing. But can you really borrow money through a personal loan without accruing interest? Below, we’ll walk you through personal loan options that don’t charge interest and the risks of these kinds of no-interest personal loans.

Can you get a personal loan with no interest?

In short, you can’t get a traditional personal loan with no interest. A personal loan—secured or unsecured—will always have an associated APR. That’s part of how personal loans work: Lenders offer them because they can make money from borrowers through interest.

However, the following borrowing options address the same goals as personal loans—and come without interest. (Click the loan type in the list below to jump to our discussion of how it works and where to get one.)

“If you’re considering no-interest personal loan options, such as BNPL loans or 0% APR credit cards, ensure you can repay the balance before or by the time the interest rate changes or the lender or company begins charging astronomical interest rates.”

Erin Kinkade

CFP®

Where to get personal loans with no interest

So where can you get these no-interest loans? Often, it depends on your credit history and what you’re trying to finance.

Interest-free cash advance

What is it?

A traditional cash advance allows you to withdraw cash using your credit card. You’ll typically pay a transaction fee plus interest on the loan from your credit card—and that interest starts accruing right away.

However, some financial technology (fintech) companies offer payday cash advances without interest. These aren’t your traditional payday loans; instead, these app-based companies allow you to borrow a portion of your scheduled paycheck without interest up to a certain amount.

Often, a credit check is not associated with these loans.

How does it work?

To participate in these interest-free cash advances, you’ll usually need to connect your bank account to the payday advance app and let the company monitor your direct deposit a few times to understand your income and payment schedule.

Then you can start borrowing money you’re scheduled to receive. The best cash advance apps don’t charge interest and may just ask for a “tip” or charge a fee for immediate payment (otherwise, you might need to wait a few days).


Tip

If you borrow part of your paycheck in advance, you’ll make less money come payday. Don’t dig yourself in a hole later by using up all your cash now.


Options to consider

The top interest-free cash advance options include EarnIn, MoneyLion, and Dave. The table below shows the lender’s name or app, and you can click the name to visit its website.

AppBorrow up toWhat to know
EarnIn Cash Out$750 per pay periodYou can leave a “tip” every time you get cash early

Limited to $100 per day

Fee for instant payments (Lightning Speed)
MoneyLion Instacash$500 per pay periodGet additional Instacash with a paid monthly membership

Fee for instant payments (Turbo)
Dave ExtraCash$500You can leave a “tip” every time you get cash early

Fee for instant payments

Interest-free buy now, pay later loans

What is it?

BNPL loans have become popular, in part because they often have zero interest. This form of short-term financing enables you to spread payments over weeks or months.

How does it work?

You can use one of many online apps for BNPL loans (also called point-of-sale loans), but many merchants offer BNPL programs at the counter when you make a purchase.

Some BNPL lenders may require a hard credit check, but many do not. Instead, you’ll offer basic personal information, make one upfront payment, and then schedule the remaining payments.

Options to consider

The table below shows four of the most popular BNPL lenders in the market. You can click the lender’s name to visit its website.

Lender/appWhat to know
KlarnaSplit into 4 payments, 30 days, or long-term financing
AfterpayPay over 6 or 12 months or in 4 interest-free payments
AffirmPay in 4 (every 2 weeks) for interest free, or make monthly payments
PayPalDivide into 4 payments or monthly payments for interest-free

0% APR credit card

What is it?

No credit card will give you 0% APR forever, but many have 0% APR introductory fees, sometimes up to 21 months. Research the best 0% APR credit cards to find options that allow balance transfers—moving debt from a high-interest credit card to a new card—and have long 0% interest periods.

How does it work?

For several months, you won’t pay interest on the balance you carry on a 0% APR credit card. However, it’s essential not to rack up too much debt; at the end of the introductory period, your debt will start to amass interest, and credit card APRs can be high.

In addition, one missed or late payment may cancel the 0% APR, and the debt you’ve taken on could retroactively earn interest. Be careful how you use and pay off these 0% APR credit cards.

Options to consider

Most major credit card companies have 0% intro APR offers for credit cards, and many have no- or low-interest options for balance transfers. The table below shows three of the best balance transfer cards available. 

Click each company’s name in the table to visit its website.

Company/card0% APR intro periodWhat to know
Citi Simplicity12 months for purchases, 21 months for balance transfersNo interest on balance transfers for the first 21 months
Capital One Quicksilver15 monthsEarn 1.5% cash back on all purchases
Discover Balance Transfer Credit Card15 monthsAllows balance transfers, but they carry a 3% intro fee

No-interest medical payments

Medical debt is one of the major reasons for taking out a personal loan. Still, some borrowers may avoid origination fees and interest payments by working out a payment plan with the hospital.

Depending on your financial situation and the hospital’s programs, you might be able to get treatment now and repay your bills with zero interest. Your best bet is to speak with the hospital’s billing department.

This can extend to your four-legged friends too. Companies such as CareCredit allow you to borrow money for a set time without interest. Your best bet, though, is to carry pet insurance to help with high vet bills.

No-interest appliance or furniture loan

Big-ticket items—houses and cars—have specialized loans, e.g., mortgages and car loans. You can get loans for less expensive (but still costly) purchases, such as furniture and appliances.

Ask the salesperson on the showroom floor what financing options they offer. Many have programs to help you pay off the purchase with zero interest as long as you keep up with the payment schedule.

Risks of no-interest personal loans

No-interest personal loans carry risks, such as:

  • Small fees: Cash advance apps may be free, but if you need money right away, you’ll often pay a small fee for instant payments. If you develop a habit of accessing your paycheck early, this fee can eat away at your finances.
  • Overspending: BNPL loans can be helpful, but they may also incentivize you to buy more than you can afford. Taking on too many BNPL loans for items you don’t need can strain your budget.
  • High interest in the long term: A 0% APR credit card is appealing, but eventually, the intro period ends, and high interest rates mean your debt will start growing fast.
  • Lack of credit building: Many no-interest loan options, such as cash advances and BNPLs, may not report your spending to the credit bureaus. This means you aren’t improving your credit score when you use such options.

Our expert recommends

Erin Kinkade

CFP®

Be sure you create and stick to a reasonable budget—and give yourself the grace to get back on track if a month or short period occurs when you stray from your plan. Consistency and discipline are essential, but life happens, so don’t get discouraged. Build in “fun” money savings to enjoy life while sticking to your budget. Planning helps avoid overspending and impulsive decisions.

How to qualify for the lowest personal loan rates

These no-interest personal loan alternatives may seem attractive, but you’re likely better off with a low-interest personal loan or credit card in the long run. You’ll need a steady income and a strong credit score to get a personal loan with the best rate.

It varies by lender, but the credit score you need for a personal loan at a competitive rate is 670 or higher. Those with excellent credit (800 or higher) will get the lowest personal loan rates.

Personal loans with a fixed interest rate may be a better choice than a no-interest personal loan because:

  • You can get a much higher loan amount than with a cash advance.
  • There’s no chance of a high interest rate later (as with an expiring intro period on a 0% APR credit card).
  • The repayment terms are much longer, meaning you’ll have smaller monthly payments you can more easily budget for.

Many personal loan lenders report your payment history to the credit bureaus, meaning you can improve your credit score during the life of your loan.