A zero-balance loan is a loan that has been fully paid off, resulting in no remaining balance. In the case of revolving credit, such as credit cards or credit lines, maintaining a zero balance means all outstanding amounts are regularly paid off. Zero-balance loans reflect responsible debt management and can improve credit scores by reducing debt-to-credit ratios. Keeping a zero balance helps borrowers avoid interest charges, encourages good financial habits, and provides more financial flexibility over time.