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.
Is it possible to get a loan with 0% interest?
Yes it is. These are loans where no interest is charged for an interest-free personal loan. Interest is the fee you're charged by the lender for borrowing money.
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.
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.
What is the NILs?
This is a no-interest loan designed by Good Shepherd 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.
No Interest Loans (NILs) allow eligible applicants 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.
How can I borrow money with no interest?
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.
To be eligible for Good Shepherd's 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.
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.
However, with these interest-free personal loans, they are usually only available for the purchase of essential household items and services. It is offered by around 500 providers across Australia.
"This type of loan can be really beneficial if you're rebuilding or getting back on your feet after a financial setback, as the lender doesn't take into account your credit score or repayment history when reviewing your application. Instead, they're focused on your ability to repay in the future, with a loan term of up to 24 months available.."
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 essential appliances 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
- Council rates
- Costs associated with a natural disaster
- Food
- Bills
- Rent in arrears
- Debts
- Cash
How do I know if 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
- Or have a Health Care Card or Pension Card
- Or have experienced domestic violence in the past 10 years
You also have to 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:
- Check if you're eligible.
- Find the nearest NILS provider either online or by calling 13 64 57.
- Set an appointment with the provider selected.
- Submit your paperwork.
- Wait for your application to be assessed.
- 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. - A 0% interest credit card
Many Australian banks and lenders offer 0% interest credit cards, usually for a set period, such as an introductory offer on purchases for 12 months. - 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. - 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.
1 - 14 of 14
Compare other products
We currently don't have that product, but here are others to consider:
How we picked theseWhy compare personal loans with Finder?
Addicted to details. We know taking out a personal loan is something you'll be hooked up with for a while. That's why we put hours into research for this guide (and still do at least once a month)
Rates obsessed. Lenders come in all shapes and sizes, that's why we don't just track the big banks, but all the digi folk too. Pretty much everyone but your parents to be honest. 
Cash for whatever you need. Lending rates verified from 180+ products day and night. Whether you're buying a car, rennovating your home or heck just ready to let loose with the spending - we got you.
Frequently asked questions
More resources on Finder
Ask a question
12 Responses
More guides on Finder
-
MoneyPlace secured personal loan
This secured loan may be used for any worthwhile purchase and requires security against a vehicle. It uses risk-based pricing, so your interest rate will be set based on your credit score and history.
-
Secured Personal Loans
Are secured personal loans better than unsecured personal loans and how do they work?
-
Pepper Money Unsecured Personal Loan
Find out more about Pepper Money's no fee personal loan and benefit from a competitive rate from 6.95% p.a., zero fees and loan terms of up to 7 years.
-
NOW Finance Secured Personal Loan
A risk-based personal loan from one of Australia's biggest non-bank lenders. Get a personalised rate which rewards higher credit scores.
-
Plenti Personal Loans
Looking for a competitive rate? Plenti offers loans funded by investors with rates that are tailored to your personal circumstances.
-
NOW Finance Unsecured Personal Loan
An unsecured personal loan with zero fees and interest rates personalised to your risk profile.
-
MoneyPlace Unsecured Personal Loan
Why not be rewarded for your good credit history? MoneyPlace offers unsecured personal loans with rates starting at 8.49% p.a. – finance a range of personal purposes and borrow up to $80,000. Read the review and see if you're eligible to apply.
-
Need a $10,000 loan in Australia?
Are you in need of a larger loan but concerned about your credit history? There still may be options available, no matter your credit history. Read our guide to find out what might be available to you.
-
CommBank Variable Rate Personal Loan
The Variable Rate Personal Loan features flexible loan and repayment terms and the ability to choose a loan amount up to $50,000. You are able to make unlimited additional repayments to help pay off your loan amount even faster, and you can redraw from your additional repayments if the need arises.
-
CommBank Fixed Rate Personal Loan
The Commonwealth Bank Fixed Rate Personal Loan offers a convenient financing solution to help you fund anything you need – borrow between $4,000 and $50,000 and have it funded on the same day you apply.
I am on DSP pension. Can i get a air conditioner interest free?
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