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Interest-free Personal Loans

You can borrow up to $2,000 or $3,000 for bond or rent in advance, rates and other essentials when you're in need.

Good Shepherd's No Interest Loans (NILs) give you a way to borrow up to $3,000 without having to pay any interest. You can use it to pay for essential goods and services, as well as some housing costs and expenses related to natural disasters.

To be eligible for NILs, you need to earn less than $70,000 before tax as a single person or less than $100,000 before tax as a couple. You're also eligible if you have a Health Care Card or Pension Card. You will also need to demonstrate that you can afford to repay the loan.

What is an interest-free personal loan?

As the name suggests, no interest is charged for an interest-free personal loan. Interest is the fee you're charged by the lender for borrowing money. In this case, you are required to only repay the amount borrowed. With standard personal loans, lenders charge interest on top of the loan amount.

The most common type of interest-free personal loan in Australia is Good Shepherd's No Interest Loans (NILs). Good Shepherd is a not-for-profit community-led organisation committed to providing affordable finance for Australians in need. It has a dedicated No Interest Loans team you can call on 13 64 57.

With a regular personal loan, you can use the funds for almost any legitimate purchase. You can use it to finance a car, a wedding or holiday, or just about anything you wish. With interest-free personal loans, how you can use the funds is comparatively limited. These loans are usually only available for the purchase of essential household items and services.

What is NILs?

This is a no-interest loan designed to provide low-income earners access to safe, fair and affordable funding. No interest or fees are charged. If you're looking for income relief, you should consider this loan before opting for any other form of expensive credit.

It is offered by around 500 providers across Australia.

The eligibility criteria for NILs is different from that of a regular personal loan. This is because these loans are intended for people facing financial difficulties and who have low-incomes. You will have to prove that you're in need of these loans to be eligible.

How does NILs work and what can I use it for?

Around 500 providers work with Good Shepherd to provide NILs to families in need of credit assistance. The basic premise is that as one borrower pays off their loan, those funds are then allocated to another borrower in need. This is called "circular community credit".

As we mentioned above, NILs comes with restrictions on usage. We've outlined what you can and can't use the loan for:

  • Household items and essentials like fridges, stoves and washing machines
  • Household furniture and repairs
  • Car repairs and registration
  • Medical or dental expenses
  • Wellbeing and life event expenses
  • Education essentials like laptops and books
  • Employment expenses like licences and registrations
  • Bond and rent in advance
  • Rates
  • Costs associated with a natural disaster
  • Food
  • Bills
  • Debts
  • Cash

Am I eligible for NILS?

To be eligible for NILS, you need to:

  • Earn less than $70,000 a year before tax as an individual, or $100,000 if you have a partner or children


  • Or have a Health Care Card or Pension Card
  • Or have experienced domestic violence in the past 10 years
  • Show that you can repay the loan

Does applying for NILS impact my credit score?

No credit checks are performed when applying for NILS. This means that your score will not be impacted. Additionally, if you have bad credit, you can still qualify for the loan so long as you can prove it can be repaid.

How can I apply for NILS?

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

  1. Check if you're eligible.
  2. Find the nearest NILS provider either online or by calling 13 64 57.
  3. Set an appointment with the provider selected.
  4. Submit your paperwork.
  5. Wait for your application to be assessed.
  6. You will receive the outcome by phone or email.

Are there other interest-free loans available?

If you don't qualify for NILS, there are other options available:

  • 0% interest financing from retailers
    Some retailers offer interest-free periods on the sale of their goods and appliances. For instance, The Good Guys offers up to 60 months interest-free on home appliance purchases with a minimum spend in-store or online.
  • Centrelink cash advance
    This allows you to receive an advance payment on your Centrelink benefits. This is not an additional payment, but a part of your existing allowance paid in advance. You may be eligible depending on how long you have been with Centrelink and how much you receive. You can contact the Department of Human Services for more details.
  • Buy now pay later
    Buy now pay later allows you to buy an item or a service and pay for it in instalments. No interest is charged during the stipulated period. There are also buy now pay later services that let you pay your bills in instalments.

There are also a few low-interest options available. These include:

  • StepUp Loans
    If your income is small, you could be eligible for a StepUP personal loan. This program is managed by Good Shepherd Microfinance in partnership with NAB. With this loan, you could borrow between $800 and $3,000, with a loan term of up to 3 years. The interest rate is fixed at 5.99% p.a.
  • Pension loans scheme
    If you qualify for a pension and hold equity in real estate, this government scheme uses the funds tied up in real estate as a non-taxable loan. The rate offered is significantly lower than the rates charged on other personal loans. You can contact the Department of Human Services for more details.

Personal loans for Centrelink applicants

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

There are a range of credit cards which offer 0% introductory rates on purchases. You can compare a range of these products below. Keep in mind that you'll need good credit to be eligible.

Name Product Purchase rate p.a. Balance transfer rate p.a. Annual fee Interest-free period
Credit Union SA Education Community Credit Card
0% for 6 months, then 11.49%
0% for 6 months, then 11.49%
Up to 55 days on purchases
Save with an ongoing $0 annual fee and 0% p.a. interest on purchases, balance transfers and cash advances.
NAB StraightUp Card
Save with 0% p.a. interest charges and 0% foreign transaction fees. Plus, $0 monthly fees when you don't use the card or carry a balance.

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12 Responses

    Default Gravatar
    ReneeJanuary 4, 2024

    I would like a interest free loan to buy a new motor for our air conditioner $15000

      SarahJanuary 10, 2024Finder

      Hi Renee, Interest-free loans are very hard to come by. You could try reviewing some of these low interest loans.

      Alternatively, you may be able to get a 0% credit card with 12 months of no interest, but this can be risky, as after the 12 months is up, vbery hefty interest rates of 20% or more would apply.

      Hope this helps!

    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

      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!


    Default Gravatar
    MaryamNovember 10, 2018


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

      JeniNovember 10, 2018Finder

      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 our Centrelink home loan guide for your 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!


    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 ?

      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. You can learn more about the types of loans available to Centrelink recipients.

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


    Default Gravatar
    TanyaApril 1, 2016

    Need help fill in

      ElizabethApril 1, 2016Finder

      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,


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