Interest-free personal loans in Australia

If you earn a low income, finding the money to afford even the most basic goods and services can be difficult. The No Interest Loan Scheme (NILS) is designed to provide low-income earners with access to interest-free personal loans, helping them get fair and affordable financing.

Find out if you're eligible and compare your other options below.

How does an interest-free personal loan work?

These loans are offered by Good Shepherd Microfinance and are part of NILS. These interest-free personal loans let you purchase essential items you may not be otherwise able to afford.

Community organisations work with Good Shepherd and are able to provide this type of loan to impoverished families by having a set amount of funding available. As one borrower is paying off their loan, those funds are being allocated to another needy family. There are no fees or interest charges to worry about and each recipient is given 12–18 months to pay back the principal loan amount.

Personal loans for Centrelink applicants

What can I use an interest-free personal loan for?

NILS loans are only available for the purchase of essential household items and services, including:

• Fridges, freezers, stoves, washing machines, dryers and some items of furniture
• Some medical and dental services
• Essential educational items, such as computers and textbooks
• Some other items and services as requested

How does the lending process work?

NILS is based on a system of circular community credit. This means when you make a repayment on your interest-free personal loan, those funds are then made available to someone else in the community.

You can apply for a NILS loan by following a few simple steps:

1. Enquire about interest-free personal loans online through the NILS website or by phoning 13 NILS (13 64 57). This will allow you to determine whether you may be eligible for a loan.
2. Attend an interview with a NILS loan provider in your local area.
3. Your loan application is assessed.
4. You're informed about the outcome of your loan application. If successful, you'll then agree on repayment terms.
5. Use the funds to pay for essential services or household items.
6. Repay the loan amount over 12–18 months.

Are there any alternatives?

If you don’t meet the strict eligibility criteria necessary to qualify for a NILS loan, there are still other options available to help you access the finance you need:

• Centrelink cash advance. If you receive Centrelink payments and need emergency funding you can apply to have one of your payments made in advance. Contact the Department of Human Services to find out more.
• Pension loans scheme. If you’re old enough to qualify for a pension and you hold equity in real estate, this government scheme uses the funds you have tied up in real estate as a non-taxable loan. While these loans do come with interest, the rate is significantly lower than the rates charged on other personal loans. Contact the Department of Human Services for more details.
• Short term loans. Short term loans are available for people who receive Centrelink benefits, to those who are unemployed and even people with bad credit. You may also want to compare your payday loan options if you're in need of quick financing.

Have more questions about interest-free personal loans?

Can I use a NILS loan to catch up on my rent?

No, you cannot use the funds from an interest-free personal loan to pay rent.

What else can’t I use the loan amount for?

You can’t use a NILS loan to consolidate debt, pay bills or take a holiday. In fact, you can only use the funds you receive for the approved loan purpose.

Can I still qualify for an interest-free personal loan if I have a bad credit history?

Yes, there are no credit checks required during the application process for a NILS loan.

What information do I need to take along to the loan interview?

When you arrange a loan interview appointment, the loan provider will advise you what information and documentation you need to take.

Are there any application fees or monthly or annual fees attached to these loans?

No, there are no fees or charges on a NILS loan.

What is Good Shepherd Microfinance?

Good Shepherd Microfinance is Australia’s largest microfinance provider. It provides a wide range of affordable financial programs to people who are financially excluded.

Are there any other ways I can get interest-free terms on purchases?

Yes, you may also want to consider a credit card that offers a 0% p.a. introductory rate on purchases.

How else can I get interest-free terms on purchases?

A range of credit cards offer 0% introductory rates on purchases. Compare a range of these products below, but keep in mind you'll need good credit in order to be eligible.

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Name	Product	Product Description	Purchase rate (p.a.)	Balance transfer rate	Annual fee	Interest Free Period	Amount Saved
Citi Rewards Platinum Credit Card - Exclusive Offer Exclusive		Finder Exclusive: Save with 0% interest on purchases and balance transfers for 13 months (with no BT fee). Plus, a discounted $49 annual fee for the first year.	0% for 13 months, reverts to 21.49% p.a.	0% p.a. for 13 months	$49 p.a. annual fee for the first year ($149 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Coles No Annual Fee Mastercard		Offers 0% p.a. on purchases and balance transfers for the first 12 months and an ongoing $0 annual fee. Plus, earn flybuys for your eligible spend.	0% for 12 months, reverts to 19.99% p.a.	0% p.a. for 12 months	$0 p.a.	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Commonwealth Bank Low Fee Gold Credit Card		Save with 0% p.a. for 15 months on purchases and an ongoing annual fee waiver when you meet the spend requirement. Plus, included insurances.	0% for 15 months, reverts to 19.74% p.a.	5.99% p.a. for 5 months	$0 p.a. annual fee for the first year ($89 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
St.George Vertigo Classic - Exclusive Offer Exclusive		Finder Exclusive: Low rate card offering 0% p.a. interest on purchases for the first 14 months and on balance transfers for 6 months. Plus, a $0 first year annual fee.	0% for 14 months, reverts to 13.99% p.a.	0% p.a. for 6 months	$0 p.a. annual fee for the first year ($55 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Citi Clear Platinum Credit Card		Enjoy a $0 first year annual fee and a 0% introductory rate on purchases and balance transfers. Plus, complimentary purchase insurance cover.	0% for 9 months, reverts to 14.99% p.a.	0% p.a. for 9 months	$0 p.a. annual fee for the first year ($99 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Virgin Australia Velocity Flyer Card - 0% Interest Offer		Enjoy 0% p.a. interest on purchases for 14 months, a reduced first year annual fee and Velocity Points per $1 spent.	0% for 14 months, reverts to 20.74% p.a.	0% p.a. for 6 months	$64 p.a. annual fee for the first year ($129 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Commonwealth Bank Low Rate Gold Credit Card		Keep interest costs low with a 0% p.a. introductory rate on purchases for 15 months. Plus, access to complimentary insurance covers.	0% for 15 months, reverts to 13.24% p.a.	5.99% p.a. for 5 months	$89 p.a.	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Bendigo Bank Low Rate Mastercard		A no-frills credit card with a competitive annual fee and 0% p.a. on purchases for 15 months. Plus, a 0% balance transfer offer for 6 months.	0% for 15 months, reverts to 11.99% p.a.	0% p.a. for 6 months	$45 p.a.	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
St.George Vertigo Platinum		Features an introductory 0% p.a. purchase rate, $49 first year annual fee and complimentary travel insurance covers.	0% for 15 months, reverts to 12.99% p.a.		$49 p.a. annual fee for the first year ($99 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
St.George Rainbow Vertigo Platinum		All the platinum features of the Vertigo Platinum Visa with a rainbow design in support of the LGBT community.	0% for 15 months, reverts to 12.99% p.a.		$49 p.a. annual fee for the first year ($99 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Coles Low Rate Mastercard		Offers 0% p.a. interest on balance transfers and purchases for the first 12 months. Plus, earn flybuys points at Coles Supermarkets.	0% for 12 months, reverts to 12.99% p.a.	0% p.a. for 12 months	$58 p.a.	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
Bank of Melbourne Vertigo Platinum		Offers a 0% p.a. purchase rate for 15 months, a reduced annual fee for the first year and complimentary travel insurance.	0% for 15 months, reverts to 12.99% p.a.		$49 p.a. annual fee for the first year ($99 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...
BankSA Vertigo Platinum		Offers an interest-free purchase promotion, a discounted annual fee of $49 for the first year and complimentary travel insurance.	0% for 15 months, reverts to 12.99% p.a.		$49 p.a. annual fee for the first year ($99 p.a. thereafter)	Up to 55 days on purchases		Go to site More info	Compare	loading Fetching your data...

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