Zero Interest Loans for Federal Employees A Quick Guide

Federal employees are the topmost honorable workers in the country, without any doubt. The government provides many facilities for federal workers, including health, social and financial insurance. Among these facilities, the zero interest loans for federal employees are the most convenient facility for a federal employee.

Nowadays loan is a lifesaver scheme. If it is a zero-interest loan, that is like a silver line. However, many lenders or mortgage companies in the government sector provide federal employees zero-interest loans for homes, education, car, or property.

Government employees can get zero-interest loans with easy procedures. if you are looking to get a zero-interest loan for a federal employee and how it works, then go through our article-

Zero Interest Loans for Federal Employees

What is Zero-Interest Loan?

A zero-interest loan is referred to as a loan that can be repaid with only principal money. There is no need to return additional cash with the principal balance. Usually, lenders set a schedule for repaying the loan for borrowers. Some lenders or mortgage companies have a strict policy for zero-interest loans. They fixed deadlines with no extra time.

If any borrowers fail to return or repay the loan in due time, the company may issue penalties like a significant amount. Many lenders or bank companies give 12 months or more time for loan installment. Zero-interest loans are available in categories like home, car, student, or particular loans for federal employees.

Though many brokers require a credit score of 720 or above for zero-interest loans, there are some exceptions for federal employees or other particular cases. However, a good credit score is like a bonus point. Forget zero-interest loans.

How does The Zero-Interest Loan Work?

Usually, the zero-interest loan is one kind of loan with no down payment interest policy or any other extra charge for getting a loan. Borrowers need to pay only the principal balance during loan repayment. However, most lenders or mortgage companies have a strict schedule to meet the entire balance in time.

Even many banks or companies require a high percentage down payment for zero-interest loans. There are short time and long time zero interest schemes depending on many terms. Credit score or history is an important fact to consider during the approved zero-interest loan.

The biggest credit score for a zero-interest loan is 720 or above. As lenders think a high credit score is a sign of capability, borrowers are eligible for a zero-interest loan. However, there is a unique scheme for federal employees with a zero-interest loan. Therefore they can also get home equity loans with low income.

How do you Apply for Zero Interest Loans for Federal Employees?

Federal workers or employees can get zero-interest loans from government-backed banks or organizations. Part-time a full-time federal employee is eligible for a zero-interest home loan but if they work more than one year under government job sectors.

However, there are some conditions to getting a zero-interest loan under the federal employee scheme. A zero-interest loan application may take time up-to 5- 6 months to get approved. But the federal employee must undergo the following conditions.

  • If you are a close member of a federal death employee, you can apply for a zero-interest home loan. 
  • Victims of violent crime can also apply for a zero-interest home loan
  • A federal employee who is suffering from severe illness, injury, or any other health issue.
  • Federal employee’s immediate family member suffering from severe illness or medical issue
  • If any federal employee lost their residence due to a flood, fire, or natural calamity, they could get zero-interest loans.
  • If any federal employee is a victim of domestic violence and needs a safe place, they can apply for this zero interest home loan. 

Federal workers or employees can get zero-interest loans from government-backed banks or organizations.

Who Can Get Zero Interest Loans for Federal Employees?

Federal employees work for the federal government like politicians, judges, defense workers, etc. Other non-specified federal workers are under the health department, educational institution, and social services. However, the federal government depends on workers in database offices, administrative workers, etc. though there are sectors considered a federal government job, these all sectors fall into mainly three categories.

These are the executive branch, legislative branch, and judicial branch. Federal employees get many facilities from government flexible spending accounts, social securities, employee assistance programs, child and dependent care, etc. besides these facilities, federal employees get zero-interest loan offers.

As we discussed categories of federal employees, they are mainly eligible to get zero interest home loans from banks or organizations under the government. Usually, there is no specific requirement for federal employees to get zero-interest loans.

They can get a 12-36 month loan scheme with zero interest facilities, but they might repay their entire loan in due time as there is a late penalty issue.

Where Can Get Zero-Interest Loans for Federal Employees

Nowadays, many institutions and loan companies provide special schemes for federal employees like zero-interest loans, low-interest loans, or no credit home loans. Federal employees can go to government-backed loan banks or organizations. Even non-government loan companies and organizations have loan schemes for federal employees and some banks also offer home loans with no credit.

Federal workers can apply for zero-interest loans offline and online. VA loans are specially for federal employees. Alpine Bank has offered more than $5 million in interest-free loans to federal employees and their family members. You can get the loan on the same day you apply for the loan from Alpine Bank.

Even provident Bank offered loans for a federal loan without any late payment penalty. Veridian credit union provides no-interest loans for veteran and federal employees. These banks create special loan schemes for federal employees and veteran workers to meet their financial hardships. Other organizations offer zero-interest loans like The USA Employee Credit Union, Justice federal credit union, Launch federal credit union, Nasa federal credit union, Navy federal credit union, etc.

Well, much government-backed organization or institution offers zero-interest loan scheme for federal workers. Federal employees suffer from financial problems, and medical emergencies, and to meet all their problems, they need a loan. Many federal employees seek zero-interest loans.

You need to find these federal employee loan provider banks, organizations, or mortgage companies to get loans with no interest. Also, you need to consider their policy and terms whether you can afford it or not. Here are some zero-interest loan schemes.


In a time of emergency, federal employees can get zero-interest loans from FEEA. FEEA has had zero interest loan service since 1986. This type of scheme helps many federal employees during their hard times like medical emergencies, resident issues, and the loss of a family member.

Federal employees can meet their expenses with zero-interest loans like-

  • If they have any previous mortgage loans to pay, they can complete their payment with this zero-interest loan
  • The federal worker can pay their utility bill with this loan
  • They can cover up their loss during natural disasters or any firebreaks with a loan 
  • If a federal employee or their immediate family member suffers from a severe medical term, they can use this loan.

VA loans

You can get a loan with zero interest from a VA loan if you are a federal employee or an immediate family member of any federal employee. As the government backs the VA loan scheme, it offers special schemes for federal employees with any credit score or history.

Besides these loan schemes, there are other loan programs for federal employees, but these programs may have many conditions to apply.

Dakota National Bank

Among all federal employee loan providers, Dakota National Bank is the first to launch zero-interest loans for federal employees. Though they specifically offered this zero-interest loan for people affected by the government shutdown, federal employees are eligible for this loan.

What is the Income Score Needed for Zero-Interest Loans for Federal Employees?

Income score is usually determined based on a percentage of AMI (Area Median income). If someone’s AMI score is between 50 to 80 percent, it will be known as low income. There is no particular income score to become eligible for a federal employee zero-interest loan.

Often, mortgage companies will consider your credit score, repayment feasibility, PITI, etc. If you have no savings left after your relative monthly cost, you are still eligible for a loan application. Federal employee income sources may not result in a large scale. For this reason, many federal employees face hardship in financial statements and can’t meet their necessities.

Even they often seek a loan without interest. Fortunately, there are several mortgage companies and agencies with zero-interest loans. Most banks, mortgage lenders, or organizations, do not consider income scale for loan sanctions. Even the federal employee has more facilities than regular citizens in getting a loan.

Can I Get Zero-Interest Loans for Federal Employees if my Income Score is Low?

Yes, still, you can get a loan with no interest If your income source is low. The government provides many facilities for federal employees and zero-interest loans with low income. most of the zero-interest loans are offered for low-income federal employees. As they don’t have a good figure salary, loans with interest may become difficult to pay back the loan. But there are several things to need to consider before applying for a loan.

Some banks or organizations may check your credit score or history. Even if you have another mortgage or loan, then it might affect your loan sanction. However, other things like relative monthly costs, and utility bill payments are different requirements for the zero-interest loan.

On the contrary, many mortgage companies may consider your other income sources like family member income or house rents, etc. federal employees must work in the government sector for more than one year for eligible to get a loan. So, there is no specific income scale to get a zero-interest loan for federal members.

Related article: How to get a loan for a home with bad credit.

How Can You Get Zero-Interest Loans for Federal Employees when your Income Score is Low?

Federal employees who have low income but want zero-interest loans are still eligible for loan approval. There are two types of loan schemes available for federal employees. These are average loans, and another one is a hardship loan. Suppose any employee wants a zero-interest loan despite having a low income.

In that case, mortgage companies or lenders may require some conditions like good credit score, history of payment loan on time, utility expenses or PITI, etc. sometimes, mortgage companies and agencies prefer high percentage down payment for low-income federal employees as they want a zero-interest loan.

Many banks like American Bank, Chase, Alpine Bank, FedChoice Federal credit union, JSC federal credit union, and Nasa Federal credit union provide zero-interest loans for federal employees with low income. people who work under government job sectors and their immediate family members can get a zero-interest loan with low income as it is precisely for federal workers. There are some conditions on loan applier to become eligible for a zero-interest loan despite low income-

  • Good credit score backgrounds like clearance of all bills, loans, or other mortgage stuff
  • If your income scale is low, but you can still manage your down payments on the due date, you can apply for a zero-interest loan.
  • If any federal employee has a clear and proper plan to pay back the loan and has an active credit history, you are eligible for this loan.

Many federal workers suffer from substantial financial damage due to the government shutdown, and these workers can apply for this zero-interest loan.

The zero-interest loan is suitable for these people who are confident about paying loans in a given time. As, after the loan payment deadline, the borrower will have to face penalties like extra charges. Usually, these types of loans are for a permanent federal workers, not a part-time employees. However, zero-interest loans for federal employees with low income may face difficulties in maintaining down payment.

Frequently Ask Question (FAQ)


Government has special funds for all federal employee to meet their basic needs and minimize their hardship. Most government-backed organizations or banks hold different loan schemes according to federal employee demand. Even, though it is a straightforward process to get zero-interest loans from mortgage lenders.

Federal employees, along with their immediate family, can apply for zero-interest loans at any time. But they must consider the conditions to become eligible for a zero-interest loan, as we discussed earlier. It is up to you to take a suitable loan scheme according to your capability for a zero-interest loan for a federal employee.