No or low interest loans
If you're a low income earner, in financial trouble or have a
bad credit history, you might think a high-cost small loan is your
only option. But there are other ways you can get money without
having to pay back much more than the amount you borrow.
How no interest loans work
The No Interest Loans Scheme (NILS®) provides individuals and
families on low incomes access to safe, fair and affordable access
to credit. The scheme offers loans between $300 - $1,200 for
essential goods and services.
Loans are not for cash. Repayments are set up over 12 - 18
months. There are no interest charges or fees.
You can use NILS to:
- essential household items such as whitegoods (like fridges and
washing machines), computers or furniture
- health items such as wheelchairs or asthma pumps
- to pay for car repairs (although these loans are only available
to people who live in areas where there is little or no public
NILS providers are based in community centres and other local
organisations across Australia. To be eligible for NILS, you must
have a Centrelink healthcare or pension card (or qualify for one).
You must also show that you can and are willing to repay the loan
within 12 or 18 months.
To find your nearest NILS provider, visit the Good
Shepherd Microfinance website or call 13 64 57.
Important: MoneySmart does not lend money
ASIC's MoneySmart website does not lend money or arrange loans
but is happy to answer
your questions about loans and money. Email us at email@example.com
ASIC's Infoline on 1300 300 630.
Other programs for low income
While it may be difficult to get personal loans from major
financial institutions for very small amounts, some credit
providers offer small amount loans of $2,000 or less.
The programs below can help you make ends meet.
The StepUP program offers fixed-rate, unsecured personal loans for amounts
between $800 and $3000. There are no fees or charges and the
interest rate is low. The loans can be used for essential personal,
household and domestic goods and services such as second-hand cars,
computers and medical and dental treatment.
AddsUP is a matched
savings plan open to people who have successfully repaid one NILS
or StepUP loan. Once you have saved $300, the bank will put in a
dollar for every dollar you save, up to a total of $500.
Saver Plus helps families on low incomes
develop a savings habit, build assets and improve their financial
skills. You set a savings goal and receive support and education to
help you achieve it. When you reach your goal, your savings are
matched, dollar for dollar, up to $500.
Money is a community finance hub operating in Victoria which
helps people manage their money and access no interest or low
interest loans (such as NILS) to purchase household goods. The
service also provides tips about buying energy-efficient products
and getting the best price on goods through a buying service. Good
Money is not-for-profit and does not charge fees.
Case study: Indira bought a new washing machine with a NILS
couldn't afford to buy a new washing machine when her old one broke
down. When a friend told her about NILS, she went to her community
centre to ask about the scheme.
She showed the NILS loans adviser her Centrelink pension card
and other documents to apply for the loan. The adviser helped her
work out how much she could afford to repay. Indira chose one of
the washing machines available through the program and it was
delivered to her house. She is about to make her last repayment on
the loan and is very happy with her new washing machine.
Don't borrow to pay utility
Some charities provide vouchers to assist with electricity
debts. Contact your local community organisation to find out
If you're having trouble paying a water, phone, gas or
electricity bill, contact your utility provider. Most companies
have hardship officers who can help you work out a plan to pay the
bill in instalments.
You can also talk to Centrelink to see if you can get any
financial assistance or perhaps a low income concession card. If
you're eligible for Centrelink payments, you may be able to get an
advance payment. The amount available varies depending on the type
of payment you receive. For some payments it is between $250 and
$500. For other payments, such as pensions, it is between 1 and 3
week's worth of payment. You'll have to pay this money back to
Centrelink over 6 months, but it may help cover a temporary
shortfall and you won't have to pay interest or fees.
If you are struggling to deal with a number of bills or debts,
with debt for advice.
Watch out for rental
If you don't have enough cash to pay for something upfront,
paying for it a little at a time through a rental arrangement might
seem like a good idea. But the weekly instalments can quickly add
up and you could end up paying more than you bargained for. Read rent to buy
and consumer leases before you sign up for
any rental or leasing deals.
There are better ways to get the money you need
than borrowing money at high cost. Check out all your options and
avoid getting into debt.
Last updated: 08 Oct 2015