A low-interest loan is a type of loan that comes with an interest rate that is lower than the average or prevailing interest rates for similar types of loans. These loans are often sought after because they result in lower overall borrowing costs and more affordable monthly payments.
Companies that offer zero-interest loans tout these vehicles as no-lose opportunities for borrowers. A major purchase that might otherwise require a lump-sum payment can be spread out over 12 months to several years, with 0% interest, thereby creating a more palatable cash flow situation. But such loans present pitfalls, including the temptation to make impulse purchases, the tendency to overspend, and exposure to exorbitant penalties for violating a loan's terms.
LightStream provides an attractive option for personal loans, especially if you have a strong credit history. With competitive interest rates and a lack of fees, it's a borrower-friendly choice.
SoFi's personal loans stand out as a top-tier lending option, boasting the qualities of a five-star lender. They offer a wide range of loan amounts, flexible repayment terms, and a host of special features that set them apart.
Upstart is an online lending platform that facilitates personal loans by connecting borrowers with banks and credit unions. While it offers fast approval and funding times, it comes with some limitations.
Discover stands out for several reasons. First, it offers unsecured personal loans, which means borrowers don't have to provide collateral like a car or savings account.
Universal Credit’s starting rates are high compared to other bad-credit lenders, so compare loan offers before you apply.
As its name suggests, a zero-interest loan is one where only the principal balance must be repaid, provided that the borrower honors the rigid deadline by which the entire balance must be satisfied. Failure to comply with the deadline carries hefty penalties. Most notably, the lender may rescind the 0% clause and apply backdated interest to the loan.
Loans that have no interest rate are typically referred to as "interest-free loans." These loans are relatively rare, and when they do exist, they often come with specific conditions and are typically not offered by traditional financial institutions. Here are a few examples of interest-free loans:
Minimum loan amounts are set by individual lenders, so the smallest loan you can get from some lenders may be more than you need. But there are lenders that offer small personal loans, including loans of $1,000 or less.