> For the complete documentation index, see [llms.txt](https://docs.ethos.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.ethos.finance/understanding-ethos-reserve/zero-interest-lending.md).

# Zero-Interest Lending

Ethos Reserve issues interest-free loans denominated in the $ERN stablecoin. Instead of paying interest, users pay a small issuance fee, meaning they don’t need to worry about micro-managing their position. The issuance fee usually sits around 0.5%, but it varies slightly depending on the state of redemptions. Learn more about redemptions in [this section](/understanding-ethos-reserve/how-redemptions-work.md).

**There is no fee for paying back a loan.**

**ERN Loan Example**

* If a user deposits sufficient collateral, they can take out a 100 ERN loan.
* Their total debt will appear as 110.5 ERN, which is made up of a 0.5% issuance fee (in this case 0.5 ERN), 10 ERN held as a liquidation deposit, and 100 ERN minted to the user’s wallet.
* When the user pays back 100.5 ERN, the 10 ERN liquidation deposit will automatically be paid into their position and the position will be closed.

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