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.
What's in this guide?
- Am I eligible for interest-free personal loans?
- How does an interest-free personal loan work?
- What can I use an interest-free personal loan for?
- How does the lending process work?
- Are there any alternatives?
- Have more questions about interest-free personal loans?
- How else can I get interest-free terms on purchases?
Am I eligible for interest-free personal loans?
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.
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.
What can I use an interest-free personal loan 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
- Some other items and services as requested
NILS loans are only available for the purchase of essential household items and services.
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:
- 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.
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?
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.
Personal Loan OffersImportant Information*
You'll receive a fixed rate between 6.99% p.a. and 28.69% 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.
You'll receive a fixed rate between 9.99% p.a. and 18.99% p.a. ( 10.66% p.a. to 19.59% 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. (13.34% p.a. comparison rate) or less. See Comparison rate warning in (i) above. Application fee of $150 waived off.
You'll receive a fixed rate between 7.5% p.a. and 20.49% p.a. based on your risk profile
A loan from $10,000 to use for a range of purposes. Benefit from no ongoing fees and no early repayment fee.
You'll receive a fixed rate between 7.95% p.a. and 16.95% 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.
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