Dive deeper: Financing partners for purchasing items
5 types of no-interest loans
Where to find zero-interest loans in Canada and lock in the best deal.
Loans with no interest might sound like they’re too good to be true, but there are several legit zero interest borrowing options available. From cash advance apps and Buy Now Pay Later plans to government-backed student loans, let’s take a look at five types of no-interest loans in Canada, how they work and how to get funded.
1. Cash advance apps
Best for: People who want a small, fast loan with no credit check.
How it works: Cash advance apps like Nyble, Bree and KOHO Cover provide interest-free loans of up to $500. You can usually apply without a hard credit check, and it’s possible to get instant access to your funds.
Benefits
- Instant. You can apply online and get access to your cash advance funds instantly.
- Easy requirements. There’s no need to go through a credit check, and non-employment incomes are accepted.
- Flexible repayments. You may be able to extend your payment due date as needed.
What to watch out for
- Monthly fee. A monthly subscription fee may apply.
- Instant funding fee. Providers will usually charge an additional fee if you want instant access to your funds—otherwise you may have to wait up to three business days.
- Small loan amounts. This loan may not be enough if you need more than a few hundred dollars.
Compare cash advance apps with 0% interest
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Finder Score for cash advance apps
To make comparing even easier, we came up with the Finder Score. Interest rates, fees and features across 5+ cash advance apps are all weighted and scaled to produce a score out of 10. The higher the score the better the loan—simple.
Which cash advance app has the lowest fees?
Nyble is the cash advance app with the lowest fee. Why? Its monthly fee is optional, so you don’t need to pay it to get a cash advance. And because it offers no-interest loans of up to $250, it’s a cheap option when you need some extra funds.
Bree has a mandatory $2.99 monthly fee, whether you opt for standard or instant funding. There’s no fee for standard funding, which can take up to three business days, but you will pay an optional fee for express funding.
KOHO Cover has a monthly fee of at least $2, and you may also have to pay a monthly subscription fee for your KOHO membership plan.
2. Buy Now Pay Later programs
Best for: People who want to split the cost of a large purchase into smaller installments.
How it works: BNPL providers like Afterpay, Sezzle and Klarna allow you to split the cost of a major purchase into four equal, interest-free payments over six weeks. Simply select BNPL at checkout and make your first payment, then make the next three payments every two weeks. Other providers like Flexiti offer a store credit card that you can use to make purchases at participating retailers, then break up your purchase into equal, no-interest monthly payments.
Benefits
- Quick and convenient. Get fast access to the credit you need when you check out.
- Spread out payments. BNPL programs make it easier to pay off large purchases, splitting the sticker price into more affordable installments.
- No credit check. Many BNPL providers only do a soft credit pull rather than a hard credit check, so applying for a BNPL plan won’t hurt your credit score.
What to watch out for
- Might hurt your credit score. Some BNPL providers report late or missed payments to the credit bureaus.
- Spending more than you can afford. The ease of access to BNPL credit increases the risk of overspending.
- Fees. Watch out for late fees, service fees and other hidden charges that increase the cost of borrowing.
BNPL programs with 0% interest
| BNPL provider | How it works |
|---|---|
| Affirm |
|
| Afterpay | Split your purchase into four equal, interest-free payments over six weeks. |
| Flexiti |
|
| Klarna | Split your purchase into four equal, interest-free payments over six weeks. |
| Sezzle | You have the option to:
|
3. 0% financing deals on cars
Best for: People with excellent credit.
How it works: If you have strong credit and you’re looking to purchase a car, dealers offer 0% financing plans to attract buyers. You’ll need excellent credit to qualify, while the 0% offer may apply for some or all of the loan term. You may also need to meet a minimum down payment requirement.
Benefits
- Convenient. It’s quick and easy to get financing through the dealership.
- No interest. Your loan repayments go towards the loan principal only, with no interest charges.
- Big savings. A no-interest loan could save you thousands of dollars over the full repayment period.
What to watch out for
- Not accessible to everyone. You won’t qualify for 0% financing if you have bad credit.
- May only apply to specific models. The dealership may only offer financing on specific vehicle models and higher trim levels.
- Watch out for fees. Check the fine print for any loan fees and sales charges that apply.
- Make sure you’re getting a competitive price. The dealer may inflate the purchase price for the car you buy.
Dive deeper: 0% car financing
4. Canada Greener Homes Loan
Best for: Homeowners with good credit who want to make energy-efficient improvements to their homes.
How it works: The Canada Greener Homes Loan program provides no-interest loans of up to $40,000 to fund energy-efficient home improvements. These unsecured personal loans have repayment terms of 10 years, and you’ll need to have a pre-retrofit evaluation carried out to qualify.
Benefits
- Large loan amount. Loans of up to $40,000 are offered through the program.
- No collateral required. You don’t need to offer any assets as collateral to secure the loan.
- Save money. Energy-efficiency upgrades will also help you save money on utility bills over time.
What to watch out for
- You only get a portion of the loan upfront. Up to 15% of the loan (or 25% if you live in the North or off-grid) can be delivered upfront.
- Slow funding. Loan application processing and funding take time, so don’t expect fast access to funds.
- Eligibility requirements. You’ll need to have good credit and provide proof of income and employment to qualify.
5. Government-backed student loans
Best for: Students who are enrolled in an eligible program of study and can demonstrate their financial need for student aid.
How it works: The Government of Canada’s Canada Student Loans Program provides no-interest loans to help students cover up to 60% of tuition costs. Provincial student loans are also available, but whether or not they’re interest-free depends on where you live.
Benefits
- Lenient eligibility criteria. In many cases, you won’t need to undergo a credit check to apply for government-backed student loans.
- Low or no interest. Even if interest does apply to your provincial student loan, rates will typically be lower than on loans and lines of credit from banks and private lenders.
- Grace period. Federal government student loans come with a six-month non-repayment grace period when you finish studying.
What to watch out for
- Limits apply. Canada Student Loans Program loans allow you to borrow up to $300 per week of study.
- Slow funding. It’s recommended that you apply for a no-interest loan at least two months before the start of your course to ensure that you get funded in time.
- Requirements. You’ll need to demonstrate financial need to qualify for a student loan.
Are there no interest business loans?
No, there are no zero-interest business loans in Canada. Interest-free loans were previously available under programs such as the Canada Digital Adoption Program and the Canada Emergency Business Account, but applications are no longer available.
If you’re looking for interest-free funding that you don’t have to repay, check out our guide to small business grants in Canada. Other information about accessing funding for your business can be found in our guide to the Canada Small Business Financing Program.
Can you get no-interest loans in Canada with bad credit?
Yes, it’s possible to get no-interest loans in Canada with bad credit, but only with some types of loans.
Cash advance apps don’t conduct credit checks, so it’s possible to get funded even if you have bad credit. BNPL providers usually conduct soft credit checks only, so you may be able to get approved for a BNPL plan. However, you may only be approved for a small purchase amount.
It’s also possible to qualify for a government-backed student loan with bad credit, but other no-interest loans like 0% car financing and the Canada Greener Homes Loan require good to excellent credit.
Can you get no-interest loans in Canada with no credit check?
Yes, you can. Cash advance apps like Nyble and Bree offer no-interest loans with no credit check, so you can qualify for funding with less than perfect credit. BNPL providers generally conduct soft credit pulls only, while you can also get a government-backed student loan without a credit check.
Watch out for scams about loans with no interest or very low interest
Sometimes when a loan deal sounds too good to be true, it actually is. Predatory lenders and scammers use attractive-sounding offers like no-interest loans or extremely low interest rates to lure in unsuspecting borrowers.
In some cases, a 0% interest rate may be offered, but the loan fees that apply mean you end up getting a much higher APR. Be sure to check the fine print to make sure you know exactly how much a loan costs before signing a contract
In other cases, you could be the target of an outright scam. Make sure you know the red flags that could indicate a scam, such as:
- Unsolicited loan offers
- Lenders who promise guaranteed approval
- Lenders that request you to pay any upfront fees
Check out our guide to personal loan scams for tips on how to spot a scam.
Bottom line
If you’re searching for loans with no interest, there are several options to choose from. But whether or not you qualify for 0% financing varies depending on a wide range of factors, so you’ll need to compare no-interest loans in Canada from a range of providers before deciding where to apply.
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