Interest-free loans: what are the options in the Czech Republic? Unexpected expenses catch every one of us by surprise from time to time. Sudden rises in energy prices and growing inflation are a worry for many single parents and widowed pensioners. Ideally, you can cover these costs from your savings. However, these may not always be enough, so you need to look for other solutions. Choosing the right loan is one of them. Do you know your options for interest-free loans?
What is an interest-free loan?
It is a specific type of loan with a zero interest rate, which means the lender receives nothing in return for lending the money. It is usually a verbal or written agreement that you arrange with good friends or within your close family.
However, you can also get an interest-free loan as an employee benefit from the company you work for. Taking an active interest in one shows good financial literacy and sensible behaviour. In the Czech Republic, however, this is not a very common benefit.
Other providers are most often non-bank financial companies (Zaplo, Kamali, Creditea, Provident). To compare them, see our loan comparison. To get an interest-free loan from them, however, you must meet specific conditions, and they usually lend you money free of charge only once and for a very short period. Of course, these non-bank companies are not doing this out of kindness. They use the interest-free loan to attract new customers and expect that the customer will come back to them later for more loans.
At present, you can also get a subsidised loan from the state. However, you or your partner must be under 40 years of age. In that case, you can apply for a loan to buy a flat of up to 2,000,000 CZK (about 92,000 USD) with a repayment period of up to 20 years, or a loan to modernise it of up to 600,000 CZK (about 28,000 USD) with a repayment period of up to 10 years.
Another way to get an interest-free loan is to keep an eye on what banks offer. Banks commonly offer an overdraft or a credit card with an interest-free period (usually 30 to 55 days), which you must strictly keep to. Otherwise, fairly high interest is charged on your debt.
An interest-free loan is currently offered by mBank. You can effectively reduce rising interest on your mortgage by transferring your mortgage to Air bank, if you deposit part of your smart reserve in an account with the bank without interest.
💡 Tip: Also read our article about the housing allowance, which helps people in difficult life situations: Housing allowance and the conditions for getting it
Interest-free loans between private individuals
If you borrow money without interest within your family, you are halfway to solving a pressing problem. However, you also need to think about the legal side. Ideally, discuss the loan conditions in detail with the willing relative or friend and put the agreed terms in writing.
Both you and your lender should sign the loan agreement. It should also include the date the money was lent and the date it is to be repaid, or the agreed instalment amount. Only then will you feel that everything is in order. And of course, you must keep to the terms of the agreement.
If you are the lender, think carefully about who you lend your spare money to. Remember that even an interest-free loan can ruin a long friendship.
Employee benefit loans
Employers are constantly looking for ways to motivate their employees and are also looking for attractive benefits. If you are a long-serving and loyal employee, you may be able to get a loan with a reduced or even zero interest rate.
Providing a loan is subject to certain rules. You can find out more in Act No. 257/2016 Coll., on Consumer Credit. Also pay attention to Act No. 586/1992 Coll. on Income Taxes, which deals with the tax side.
Factors that affect whether you get an employee loan:
- The employee’s age.
- Salary level.
- Number of years worked.
- Job position.
- Professional qualifications.
Subsidised loans from the state
The Czech state also helps young people buy property with a loan through a programme called Own Housing (Vlastní bydlení). This programme has been running since 2018. Its aim is to make housing more affordable for young people.
If you want to get a loan, you must apply to the State Investment Support Fund (Státní fond podpory investic). The condition is that neither you nor your partner may own a flat or a share in a housing cooperative.
Property prices and rents are gradually rising, so this programme is also changing. Although the programme is gradually increasing the loan amounts, they are still not high enough and usually do not cover the full cost of buying a property.
For building a family house, you can apply for up to 2,400,000 CZK (about 110,000 USD). However, you must be able to repay it within 20 years, which is quite restrictive compared with a standard mortgage or a building savings loan. The advantage is the low interest rate, which is around 1%.
If you want to build or buy a property, you cannot rely only on help from the state. You must find ways to build up your own deposit. Building savings (stavební spoření) is an ideal product that can help you effectively. At present, you can even open one without an entry fee and with state support.
Another programme that aims to support energy savings is the Insulation (Zateplování) programme. It is mainly intended for those of you who are owners or co-owners of apartment buildings. It offers you the option to apply for a loan of at least 500,000 CZK (about 23,000 USD) with a repayment period of up to 20 years. The loan is provided interest-free, but you must submit your application for it before the construction work starts.
💡 Tip: Also read our article about paying off debts quickly and effectively: How to pay off debt quickly and easily?
Interest-free loan from mBank
This online bank, which of course also has branches, offers its customers an interesting product. It can help you deal effectively with financial difficulties. What are its conditions?
Banks rarely offer interest-free loans. You should always check not only the interest rate but also the indicator of the real cost, the APRC (roční procentní sazba nákladů, RPSN). What does this abbreviation mean? It is the annual percentage rate of charge, which includes the administration fees for providing the loan. And it is usually not zero.
The financial institution mBank will lend you an amount of 10,000 to 40,000 CZK (about 460 to 1,800 USD) interest-free with repayments over 12 to 24 months.
However, expect a 2% fee. You can repay the loan at any time without penalties. The bank does not require complicated proof of income, but it must be your first loan with the bank.
However, also check the APRC. It is stated as a maximum of 3.81%. If you borrow 30,000 CZK (about 1,400 USD) with a repayment period of 12 months, expect a monthly instalment of 2,500 CZK (about 110 USD). If you keep to the repayment schedule, you will pay the bank 30,600 CZK (about 1,400 USD) in total.
You can fill in and submit the loan application online from the comfort of your home. If you are a customer of the bank, you will receive the money in your account as soon as the loan is approved. Non-customers can open an account free of charge.
Interest-free loans from non-bank companies
The company Kamali will lend you 1,000 to 20,000 CZK (about 46 to 920 USD) without interest only if you are a Czech citizen, it is your first loan from them, and you repay it within 14 days.
The company Provident offers very similar conditions with its product Zaplo. With this company, however, check the indicators carefully, such as the interest rate and APRC. The company will lend you a maximum of 30,000 CZK (about 1,400 USD) free of charge for your first loan, for a period of 30 days. If you borrow the same amount again for 30 days, you will face an interest rate of 279.83% and an APRC of 1,141.2%.
The ideal state for your household’s financial health is to have an emergency fund that covers a period of at least six months. Try to solve financial difficulties in the least painful way and always think about tomorrow, when someone will be collecting the debt from you.
If your situation allows it, use interest-free options such as a loan from family, an overdraft or a credit card to borrow smaller amounts. For larger amounts, consider a loan from the state, an optimised mortgage or a bridging loan from building savings (stavební spoření).
Try to avoid loans from non-bank companies. Unfortunately, they can ruin your household financially if you do not repay within the interest-free period. If you find yourself in a difficult financial situation, try to get a general-purpose consumer loan from your own bank instead.
USD amounts are approximate, converted at the Czech National Bank rate of 21.80 CZK (about 1 USD) per USD on 2 October 2026.
