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Interest-free personal loans in Australia

0% interest personal loans offer safe and affordable credit to help Australians in financial distress.

Matt Corke
Matt Corke

Updated

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We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.

If you earn a low income, finding the money to afford even the most basic goods and services can be difficult. Luckily, there are a number of interest-free finance options available. These include the No Interest Loan Scheme (NILS), interest-free finance packages on appliances and various other finance options.

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

Australian multiethnic couple unpack their groceries from a reusable shopping bag

What's in this guide?

What are interest-free personal loans?

Interest-free personal loans are unlike standard personal loans in that they require no interest payments on top of repaying the principal of the loan amount. With regular personal loans, you can use the funds for almost any legitimate purchase. You can finance a car or even apply for a boat loan. Personal loans for weddings or holiday loans are available too.

With interest-free personal loans, how you can use the funds is much more limited. These loans are usually only available for the purchase of essential household items and services.

The most common type of interest-free personal loan in Australia is the No Interest Loans (NILS) scheme offered by Good Shepherd Finance, a not-for-profit community-led organisation committed to providing affordable finance for Australians in need.

  • No Interest Loans (NILS) Coronavirus Relief

In collaboration with the Australian Government and National Australia Bank not-for-profit organisation Good Shepherd Microfinance is launching Household Relief Loans Without Interest for people impacted financially by coronavirus, aka COVID-19.

The interest-free loans are available up to $1,500 on terms of up to 18 months, and there are no credit checks involved in the application process. Funds from the loans are intended to for household products and utilities such as electricity bills - something standard NILS are not available for.

If you've been struggling financially as a result of COVID-19 and you have come to the end of your hardship assistance with your landlord or utility provider, a Household Relief Loan could help. For further information on NILS loans, please call 1300 770 550.

What are No Interest Loans (NILS)?

No Interest Loans are designed to provide low-income earners with access to interest-free personal loans, helping them get fair and affordable financing.

The eligibility criteria for NILS is also much more stringent than that of regular personal loans as these loans are intended for people facing financial difficulties. Therefore, applicants must prove that they are in need of these loans in order to be eligible.

Am I eligible for NILS?

You need to meet a few criteria to be eligible for NILS:

  • Have a Health Care Card or Pension Card
  • Earn less than $45,000 per year after tax ($60,000 for couples or people with dependants)
  • Have lived at your current or previous address for at least three months
  • Show a willingness and the capacity to repay the loan

There are no credit checks required during the loan application process. Instead, interest-free personal loans are offered on a basis of trust and respect.

How do NILS work?

These loans are offered by Good Shepherd Microfinance and are part of NILS. These interest-free personal loans are available up to $1,500, and 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.

What can I use NILS for?
What can't I use NILS for?
  • Fridges, freezers, stoves, washing machines, dryers and some items of furniture
  • Some medical and dental services
  • Essential educational items, such as computers and textbooks
  • Car repairs or registration
  • Some other items and services as requested
  • Food
  • Rent
  • Bills
  • Cash
  • Debt

How does the NILS lending process work?

The lending process 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:

  • 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.
  • Attend an interview with a NILS loan provider in your local area.
  • Your loan application is assessed.
  • You're informed about the outcome of your loan application. If successful, you'll then agree on repayment terms.
  • Use the funds to pay for essential services or household items.
  • Repay the loan amount over 12-18 months.

What other interest-free loans are available?

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

  • 0% interest financing from retailers

    Some retailers offer interest-free periods on the sale of their goods and appliances. For example, The Good Guys offer up to 60 months interest-free on home appliance purchases with a minimum spend in-store or online.

  • StepUP Loans

    StepUP Loans are the product of a partnership between Good Shepherd Finance and NAB. While not strictly "interest-free", StepUP Loans are low interest personal loans available from $800 to $3,000 designed mainly to help people on low-incomes finance cars and car repairs. However, some loans can also be used to fund various necessary household items.

  • 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.

Personal loans for Centrelink applicants

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.

Data indicated here is updated regularly
$
Name Product Purchase rate Balance transfer rate Annual fee Interest-free period Amount saved
ANZ Platinum Credit Card
ANZ Platinum Credit Card
0% for 17 months, reverts to 20.24% p.a.
20.24% p.a.
$0 annual fee for the first year ($87 p.a. thereafter)
Up to 55 days on purchases
Receive a 0% purchase rate offer for 17 months and a $0 first-year annual fee. Plus, complimentary overseas travel and medical insurance.
Go to site
More Info
Citi Clear Card
Citi Clear Card
0.9% for 15 months, reverts to 14.99% p.a.
0.9% p.a. for 15 months
$99
Up to 55 days on purchases
Save with 0.9% p.a. for 15 months on purchases and balance transfers. Plus, complimentary purchase insurance cover. Ends 16 November 2020.
Go to site
More Info
Bankwest Breeze Classic Mastercard
Bankwest Breeze Classic Mastercard
0% for 15 months, reverts to 10.99% p.a.
2.99% p.a. for 9 months
$49
Up to 55 days on purchases
Save with an introductory rate of 0% p.a on purchases for 15 months and 2.99% p.a. on balance transfers for 9 months.
Go to site
More Info
St.George Vertigo Platinum
St.George Vertigo Platinum
0% for 15 months, reverts to 12.99% p.a.
6.99% p.a. for 12 months
$49 annual fee for the first year ($99 p.a. thereafter)
Up to 55 days on purchases
Features an introductory 0% p.a. purchase rate, $49 first year annual fee and complimentary travel insurance covers.
Go to site
More Info
Bankwest Breeze Platinum Mastercard
Bankwest Breeze Platinum Mastercard
0% for 15 months, reverts to 10.99% p.a.
2.99% p.a. for 9 months
$69
Up to 55 days on purchases
Get 0% interest on purchases for 15 months, complimentary travel insurance and no foreign transaction fees.
Go to site
More Info
Virgin Australia Velocity Flyer Card - 0% Interest Offer
Virgin Australia Velocity Flyer Card - 0% Interest Offer
0% for 14 months, reverts to 20.74% p.a.
0% p.a. for 6 months
$64 annual fee for the first year ($129 p.a. thereafter)
Up to 55 days on purchases
Enjoy 0% p.a. interest on purchases for 14 months, a reduced first-year annual fee and Velocity Points per $1 spent.
Go to site
More Info
Bendigo Bank Low Rate Credit Card
Bendigo Bank Low Rate Credit Card
0% for 15 months, reverts to 11.99% p.a.
13.99% p.a.
$45
Up to 55 days on purchases
Get 0% p.a. interest on purchases for 15 months and a $150 Woolworths Supermarket gift card when you spend $1,000 in the first 90 days.
Go to site
More Info
Virgin Money No Annual Fee Credit Card
Virgin Money No Annual Fee Credit Card
0% for 12 months, reverts to 18.99% p.a.
0% p.a. for 12 months
$0
Up to 55 days on purchases
Save with an ongoing $0 annual fee and 0% p.a. on balance transfers and purchases for 12 months.
Go to site
More Info
Coles No Annual Fee Mastercard
Coles No Annual Fee Mastercard
0% for 12 months, reverts to 19.99% p.a.
0% p.a. for 12 months
$0
Up to 55 days on purchases
Save on new and existing interest charges with 0% p.a. on balance transfers and purchases for 12 months.
Go to site
More Info
St.George Vertigo Classic
St.George Vertigo Classic
0% for 7 months, reverts to 13.99% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($55 p.a. thereafter)
Up to 55 days on purchases
Get 0% p.a. promotional purchase and balance transfer rates and save with a first-year annual fee waiver.
Go to site
More Info
Bank of Melbourne Vertigo Classic
Bank of Melbourne Vertigo Classic
0% for 7 months, reverts to 13.99% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($55 p.a. thereafter)
Up to 55 days on purchases
Save with 0% p.a. for 7 months on purchases, 0% p.a. interest for 22 months on balance transfers and a $0 first-year annual fee.
Go to site
More Info
NAB StraightUp Card
NAB StraightUp Card
N/A
$0
Save with 0% interest charges and 0% foreign transaction fees. Plus, $0 monthly fees when you don't use the card or carry a balance.
Go to site
More Info
Bank of Melbourne Amplify Platinum
Bank of Melbourne Amplify Platinum
0% for 7 months, reverts to 19.74% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($99 p.a. thereafter)
Up to 55 days on purchases
Enjoy 0% p.a. on purchases and balance transfers along with a $0 first year annual fee waiver.
Go to site
More Info
St.George Rainbow Vertigo Platinum
St.George Rainbow Vertigo Platinum
0% for 15 months, reverts to 12.99% p.a.
6.99% p.a. for 12 months
$49 annual fee for the first year ($99 p.a. thereafter)
Up to 55 days on purchases
All the platinum features of the Vertigo Platinum Visa with a rainbow design in support of the LGBT community.
Go to site
More Info
St.George Amplify Platinum
St.George Amplify Platinum
0% for 7 months, reverts to 19.74% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($99 p.a. thereafter)
Up to 55 days on purchases
Save with 0% p.a. interest rates on purchases and balance transfers. Plus a $0 first-year annual fee.
Go to site
More Info
St.George Vertigo Classic Rainbow
St.George Vertigo Classic Rainbow
0% for 7 months, reverts to 13.99% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($55 p.a. thereafter)
Up to 55 days on purchases
All the great low cost features of the Vertigo Visa with a rainbow design in support of the LGBT community.
Go to site
More Info
BankSA Vertigo
BankSA Vertigo
0% for 7 months, reverts to 13.99% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($55 p.a. thereafter)
Up to 55 days on purchases
Enjoy a 0% p.a. for up to 22 months on balance transfers and up to 7 months on purchases. Plus, $0 first-year annual fee.
Go to site
More Info
BankSA Amplify Platinum
BankSA Amplify Platinum
0% for 7 months, reverts to 19.74% p.a.
0% p.a. for 22 months with 1.5% balance transfer fee
$0 annual fee for the first year ($99 p.a. thereafter)
Up to 55 days on purchases
Save with a 0% p.a. for up to 22 months on balance transfers and up to 7 months on purchases. Plus a $0 first-year annual fee.
Go to site
More Info
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Frequently asked questions about No Interest Personal Loans (NILS)

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Important Information*
Logo for Harmoney Unsecured Personal Loan
Harmoney Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 25.69% p.a. based on your risk profile.
Apply for a loan up to $50,000 and repay your loan over 3 or 5 years terms.

More info
Logo for NAB Personal Loan Unsecured Fixed
NAB Personal Loan Unsecured Fixed

You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.88% p.a. to 19.83% p.a. comparison rate) based on your risk profile
An unsecured loan up to $55,000 you can use for a range of purposes and pay off over up to 7 years. Note: Majority of customers will get the headline rate of 12.69% p.a. (13.56% p.a. comparison rate) or less. See Comparison rate warning in (i) above.

More info
Logo for SocietyOne Unsecured Personal Loan
SocietyOne Unsecured Personal Loan

You'll receive a fixed rate between 6.99% p.a. and 20.49% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.

More info
Logo for Pepper Money Unsecured Fixed Rate Personal Loan
Pepper Money Unsecured Fixed Rate Personal Loan

You'll receive a fixed rate between 6.95% p.a. and 17.95% p.a. based on your risk profile
A loan from $5,000 to use for a range of purposes. Make additional repayments or pay off the loan early, penalty-free.

More info

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10 Responses

  1. Default Gravatar
    RaymondFebruary 27, 2019

    Our refrigerator is on the blink and we cannot repair it,
    We need to buy a new one ASAP I am on a disability pension with my wife as my carer We have very little cash flow and savings but we own our house outright
    Wots are our options of getting a low interest pension loan

    Reply
    • Default Gravatar
      NikkiFebruary 28, 2019

      Hi Raymond,

      Thanks for getting in touch! Our page shows the list of providers who may accept your application. As it says on our page:

      You need to meet a few criteria to be eligible for an interest-free personal loan:

      Have a Health Care Card or Pension Card
      Earn less than $45,000 per year
      Have lived at your current address for at least three months
      Show a willingness and the capacity to repay the loan

      There are no credit checks required during the loan application process. Instead, interest-free personal loans are offered on a basis of trust and respect.

      Hope this helps!

      Best,
      Nikki

      Reply
  2. Default Gravatar
    MaryamNovember 10, 2018

    Hi,

    Can I get a home loan if I am on disability pension?

    Reply
    • Avatarfinder Customer Care
      JeniNovember 10, 2018Staff

      Hi Maryam,

      Thank you for getting in touch with finder.

      Since some lenders accept Centrelink benefits as your sole source of income, all you need is to do some research or look for a mortgage broker to help you on getting a home loan. You may use this page as your guide in your home loan application.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

      Reply
  3. Default Gravatar
    LisaNovember 8, 2018

    Can I borrow to buy a car I’m on centrelink benefits and I work. If so what is the most I could borrow ?

    Reply
    • Default Gravatar
      JoelNovember 8, 2018

      Hi Lisa,

      Thanks for leaving a question on finder.

      If you’re looking to purchase a car, you can consider a secured car loan from a lender that accepted Centrelink applicants. You can purchase a new or used car and use it as security for the loan to get a lower rate. Please go to this link to compare and read our guide about secured car loans.

      Please send me a message if you need anything else. :)

      Cheers,
      Joel

      Reply
  4. Default Gravatar
    TanyaApril 1, 2016

    Tanya
    Need help fill in

    Reply
    • Avatarfinder Customer Care
      ElizabethApril 1, 2016Staff

      Hi Tanya,

      If you’re looking for assistance with your application you’ll need to get in contact with Good Shepherd Microfinance directly. I’ve emailed you its contact information.

      Hope this will help,

      Elizabeth

      Reply
  5. Default Gravatar
    stephenJanuary 8, 2016

    I am on DSP pension. Can i get a air conditioner interest free?

    Reply
    • Avatarfinder Customer Care
      ElizabethJanuary 11, 2016Staff

      Hi Stephen,

      If you’re considering applying for a Good Shepherd Finance loan you can visit its website and review the eligibility criteria. An air conditioner may be considered to be an eligible household item, but its best to get in touch to find out.

      I hope this has helped.

      Thanks,

      Elizabeth

      Reply
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