Interest free loans.
While free loans are very hard to get, and they may be called different things such as grants, there are options available. Funds can be provided to low income families, struggling households, and others. The interest free loans (or 0% interest rates) can be used for everything from helping with home repairs to paying bills, emergency financial aid, housing, car payments, and more.
Note this will be the applicant borrowing money from a lender or charity. So, it does need to be repaid. The reason it may be called a free loan is that there will be no interest charged, zero origination fees, and the cost of borrowing the money will be kept as low as possible. This will make the monthly payments much more affordable for the household that needs the funds.
Sources of zero percent interest free loans
Some places to turn to for assistance include the following. Note the funds available are usually only approved for certain needs. An agency may offer a free loan to help pay for a car payment. Or the money may be approved for repairing a home or heating/cooling unit such as air conditioner, and the federal government HUD organization often provides that help. Other uses may be for paying for rent or housing, emergency medical procedures, and more. In addition, some of the free loan programs may also be referred to as grants.
Referrals as well as information on free, or even affordable loans, may be provided by local community action agencies. The locations are generally part of the front lines in fighting poverty. They can help with emergency needs or bills as well as address long term needs around employment, budgeting, debt reduction and more.
Community action agencies all offer different forms of assistance. They often rely on government funding, and when resources allow, there may be either direct financial and and/or free cash loans. The funds will be targeted (when available) for certain needs. These may be:
- Transportation expenses for work, job training, or educational needs. This may be for an emergency car repair to get to work.
- Some home buying (such as down payment or closing cost assistance) programs may be available using free loans from HUD – Housing and Urban development.
- Energy expenses, such as for weatherization or energy conservation upgrades to homes.
- Free loans may be issued for a number of other needs, and each will need to be approved by the team at a local office. Find details on local community action agencies to try for help by state.
Transportation assistance is offered by a free loan program from Ways to Work. Any type of financial help will be very limited. There may be a few thousand dollars available from a free loan for buying a used car to get back and forth to work. In some cases, the funds can pay for transportation for class, including college, a high school GED program, or federally approved good training program. The non-profit Ways to Work organization is located in many, but not all states.
Free loans may be issued by local or national churches. There may be funds from Catholic organizations, Protestant, Christian faith based groups, Jewish federations, and Muslim among other religions. Society of Saint Vincent de Paul, Unlimited Methodist Church, or Catholic Charities may all issue 0% APR loans as a last resort. The type of no interest loans from churches will generally focus on many needs.
The free money can pay for everything from rent, gasoline, utility bills, critical household food, emergency transportation to a doctor, and much more. Generally, a free loan from a church is more flexible in what it can or can’t pay for. The religious groups often depend on donations or tithes from their members, so money is limited.
One of the main charities that offers interest free loans is the Jewish Federation or Social Service Agencies. As with almost every charity that offers an assistance program, the terms and conditions will vary based on state, applicant’s income level, credit history, and other factors. In addition, some of the various federations will only give money to people of the Jewish faith, while others will only focus on individuals regardless of their religion.
Some uses of their loans may be as follows. They can pay for housing expenses, even security deposits. A big use of the free loans may be for either starting a business, or maybe paying for educational expenses to help a household increase their income from a better job. One-time health costs, even for life saving medications, may also be paid for. In general, the interest free loans are for borrower who are Jewish with one or two guarantors, all of whom must show proof of income. Learn more on the Jewish Federation interest free loans.
HUD as well as community action groups focus on home repairs, modifications, and improvements for the elderly. Other updates to owner occupied properties can be made too. One of the main ones is the Free Home Loan Rehabilitation Program. Funds can pay for everything from roof repairs to paying for structural defects, disability modifications, window repair, and much more.
Appliances may also be covered by HUD. For example, loans may be for energy efficient air conditioners or heating units, fans to cool a home during the summer, free air conditioners or box fans, and more. It will not pay for so called kitchen appliances though. While the term of the free loan will depend on many factors, some may have repayment schedules push out if 30 years.
Some lenders, fin-tech companies (like Paypal, Venmo, Square, etc.) offer interest free loans for any shopping you do. The programs are known as buy now pay later, or BNPL. Consumers in effect get to shop for and get the goods they want, but they pay for them over a few to several months - interest free. BNPL can be one way to save money on your bills and interest costs. Read more on Buy Now Pay Later apps.
Interest free loans from charities
Free as well as inexpensive loans, including for borrowers with no or poor credit histories, are available from numerous charity organizations. Both local and national groups may provide funds. These will generally be called grants from these groups. The money paid out to households will have a strict application process. Also, most charities have very limited funding, and the money allocated for no cost loans will generally run out during the year.
When applying to a charity, bring support such as a copy of lease, proof of income including from child support or unemployment, SSI payments, and more. Generally, any free loans are combined with extensive case management for the borrower. The funds, when issued, can help pay for expenses including.
- Gasoline or car repairs that are needed for work.
- Mortgage payments, rent, energy bills, and water costs.
- The loans for free can sometimes pay medical bills or health care costs, specifically a deductible or a lifesaving operation.
- Some emergency travel for a set number of needs.
- Critical food items that meet nutritional needs, specifically for seniors or children.
- Charities may not only provide loans, but there may be government aid, information on job programs, and other sources of free money.
Other uses may be approved too. A list of possible places to apply at range from the Salvation Army to Urban League (for housing related expenses), Saint Vincent, and many others. Find a listing of charities that help pay bills.