With an interest free loan you can pay off the outstanding balance at any time with no penalties.
With any interest bearing loan, you can pay off the loan at any time and you only have to pay the interest up to the point you pay off the loan. For example, if you took out an IBC over 2 years but wanted to clear it after 12 months is would be just the 12 month’s worth of interest you pay and no penalties. You would not have to pay the whole 2 year interest.