No-interest loans: 5 options to consider

Woman sitting at her desk with her laptop openImage: Woman sitting at her desk with her laptop open

In a Nutshell

No-interest loans can provide extra cash to pay a bill or cover an unexpected expense. But interest-free doesn't necessarily mean no cost. It's important to understand what fees — in addition to the principal — you may need to pay when getting a no-interest loan. We've rounded up our top picks with features such as low fees, access to money management tools, flexible repayment terms and the ability to build credit.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

A no-interest loan may sound like the perfect solution when you’re short on cash. But no interest may not mean no cost.

Some popular cash advance and buy-now, pay-later apps offer short-term no-interest loans but may charge fees that can increase the amount you have to repay.

Introductory financing offers that tout a 0% APR for a set period often come with a catch: If you pay late, miss a payment or don’t pay your balance in full before the promotional period expires, the lender may charge interest retroactively.

Can you get an interest-free loan?

You may be able to get an interest-free loan. Requirements vary based on the loan type — and some borrowers may not be eligible. In some cases, no-interest loans have introductory offers that provide 0% APR for a set period.

You may find this type of financing on auto loans from a dealer, but you typically need a good credit score to qualify. Plus, auto financing offers often vary by model and may change based on manufacturer and dealer incentives, so 0% APR financing isn’t always available.

If you turn to a cash advance app for quick funds before your next paycheck, your credit scores may be less important because cash advance lenders might not check your credit. However, you typically need a checking account with a positive balance and a steady paycheck to show you can repay what you borrow.

Some buy-now, pay-later lenders perform a soft credit inquiry to review your credit health. If you want to make a purchase with a buy-now, pay-later app, you’ll need to have a linked checking account, credit card or debit card to repay what you borrow.

Best for low fees: Earnin

Why Earnin stands out: With Earnin, you can receive interest-free cash advances of up to $500 per pay period while waiting for your next paycheck. Earnin doesn’t charge mandatory fees for standard transfers, which take one to three business days. If you need the money sooner, you may be able to get it in minutes using Lightning Speed for a fee of up to $3.99.  

  • Eligibility requirements. Earnin doesn’t check your credit, but you need a steady paycheck, direct deposit into a checking account and a fixed work location to use the app.
  • Tips. Earnin gives users the option to tip, but it’s not required.
  • Overdraft protection. Users receive low-balance alerts, and you can automatically transfer up to $100 to your linked checking account, helping you to avoid overdraft fees.

Read our full review of Earnin to learn more.

Best for managing your finances: MoneyLion

Here’s why MoneyLion stands out: With MoneyLion, you can track your finances, buy cryptocurrency, invest your spare change and earn rewards on purchases you make with MoneyLion’s debit card.

  • Loan amounts. Get interest-free cash advances of up to $250 without a RoarMoney account or $1,000 when you open a RoarMoney checking account with recurring deposits — no credit check required.  
  • Eligibility requirements. To get MoneyLion cash advances, you need a checking account with recurring income deposits and a positive balance that’s been open for at least two months.
  • Fees. MoneyLion will deliver your cash in 48 hours for free. If you need your cash sooner, there’s a fee of $4.99 for delivery to an external account and $3.99 for delivery to a RoarMoney account.

Read our full review of MoneyLion to learn more.

Best for peer-to-peer loans: Chime

Here’s why Chime stands out: With Chime Instant Loans, eligible members can get a loan starting at $100, although there is a fee. You also can receive loans from family and friends (even if they don’t have a Chime account) without using cash apps like Zelle or Venmo as long as you have a valid debit card or Chime checking account.

  • Fees. There is a fee for Chime Instant Loans, but no fee to transfer funds. Chime checking accounts have no monthly, minimum balance or overdraft fees.
  • Overdraft protection. Chime’s SpotMe feature covers up to $200 on Chime debit card purchases and cash withdrawals without charging an overdraft fee.  
  • Financial products and services. Chime also offers a secured credit card, high-yield savings accounts and access to more than 60,000 fee-free ATMs.

Read our full review of Chime to learn more.

Best for buy-now, pay-later: Affirm

Here’s why Affirm stands out: Affirm is a company that allows retailers to offer installment loans before checkout. If available, you may be able to use Affirm as a payment method on participating retailer’s website or app. Affirm’s pay-in-four option may be 0% APR for some retailers. Larger loans offered through Affirm may not be interest-free.

Affirm’s pay-in-four option may be a great option for those looking to spread out payments instead of paying in full at some retailers. You can set up automatic bimonthly payments with no impact to your credit score.

Learn more from reviews of Affirm.

Best for building credit: Sezzle

Here’s why Sezzle stands out: Sezzle is a buy-now, pay-later company that allows you to split up your purchase at checkout and includes thousands of retailers, such as Touch of Modern, Bass Pros Shops and Target.

After paying off one order on time or early, Sezzle users can upgrade to Sezzle Up. When you upgrade your account, Sezzle reports your payments to the credit bureaus, helping you establish a positive payment history when you pay on time.

  • Spending limit. Sezzle uses multiple factors to determine your spending limit, including how long you’ve been a Sezzle shopper, your credit history and your Sezzle order history. You must make a minimum purchase of $35 to use the app.
  • Free payment rescheduling. You can reschedule one payment for free on every order.
  • Fees. Sezzle charges failed payment and rescheduled payment fees (if you reschedule more than one payment per order). The company also charges convenience fees when you use a credit, debit or prepaid benefit card for scheduled payments. You can avoid convenience fees by linking the app to your bank account.

Read our full review of Sezzle to learn more.

What to watch out for with no-interest loans

No-interest loans may be a good alternative to high-cost payday loans when you’re strapped for cash or want to pay off a large purchase over time. But there are a few things to know before getting one.

  • Fees. No-interest loans may have fees attached to them, increasing the amount you have to repay. You can avoid some fees — including late, failed payment and express payment fees — by planning ahead. Others, such as potential subscription fees, can’t be avoided.
  • Deferred interest. Introductory financing that promises 0% APR for a specific amount of time often comes with deferred interest. Interest accrues on your monthly balance, but the lender waives it during the promotional period. You avoid paying interest if you pay your balance in full before the promo period ends. If you don’t, or pay late or miss a payment, you’ll be responsible for all the interest accrued during the promotional period.
  • Repayment timeline. No-interest loans often have short repayment terms.
  • Impact on your credit. Some lenders that offer no-interest loans report missed payments to the credit bureaus, which can negatively affect your credit.

If a no-interest loan isn’t right for you, you may want to consider a 0% APR credit card. You can use it to buy what you need and pay for it over time. You’ll avoid paying interest if you pay on time and have a $0 balance when the promotional period expires.

How we picked these loans

We reviewed more than a dozen cash advance and buy-now, pay-later apps that offer interest-free loans. We made our picks based on eligibility requirements, fee structure, repayment terms, the ability to build credit and the availability of tools to help manage your finances.

About the author: Jennifer Brozic is a freelance financial services writer with a bachelor’s degree in journalism from the University of Maryland and a master’s degree in communication management from Towson University. She’s committed… Read more.