No Interest Loans

Who runs it

NILs has run in Australia since 1981. Good Shepherd Australia New Zealand brings it to people through community organisations, and the Australian Government funds it through the Department of Social Services. The scheme calls itself circular community credit: as each loan is repaid, the money is lent again to the next person.

Who qualifies

Applicants must be 18 or older. Beyond that, the essentials loan asks for at least one of the following, and in every case, evidence that the repayments are affordable:

• a Health Care Card or Pension Card
• income under $70,000 a year before tax for a single person
• income under $100,000 a year before tax for someone with a partner or children
• experience of family or domestic violence in the last 10 years

For people applying on the family violence ground, the scheme says it does not ask for evidence of that experience, though it still checks that the loan is affordable. It also says a No Interest Loan is not crisis support: if you are in crisis, the scheme points to 1800RESPECT (1800 737 732). 1800RESPECT’s own advice is to call 000 if you are in danger.

There is no credit check for an essentials loan, and the scheme says its loans are not listed on a credit report. For people on Centrelink payments, the scheme lists stable accommodation among the requirements, though exceptions can be made in some cases.

What it can and cannot pay for

The vehicle loan is the one exception to the no-credit-check rule: it needs a credit check, and a default over $500 on a credit file rules an applicant out.

The scheme also lists what its loans will not pay for: bills such as gas, electricity and water, debts you already have, rent, cash in hand, holidays, groceries, petrol and other day-to-day spending, fines, and rates.

How the money moves

1. Check eligibilityThe website’s checker asks a few questions and gives an estimate of the repayments.
2. Gather the papersIdentification, proof of income, information about existing debts and bills, and a quote or invoice from the supplier with its business details and the amount.
3. A conversation about the loanA provider talks through the application to confirm the details and that the loan suits the applicant.
4. The supplier is paidOnce the loan is approved, the money goes directly to the business or service provider.
5. Fortnightly repaymentsMost loans are repaid over 12, 18 or 24 months, usually fortnightly, by Centrepay, direct deposit or direct debit.

Someone who knows roughly what they need but has not chosen the item can ask about pre-approval and send the quote later. Paying the loan off early, or paying extra, carries no penalty or fee. Approval is not instant: the scheme says providers aim to approve within a week, and times depend on how quickly the papers come in.

Homes NSW’s Rentstart bond loan, a separate scheme with its own rules, is covered in ticket 01, on Rentstart bond loans.

Telling the real scheme from a scam

Moneysmart and the scheme both warn that fake websites, social media accounts and ads are impersonating No Interest Loans to collect people’s private details. The scheme says Good Shepherd and its community partners will never ask for a myGov sign-in or bank details, and never use social media to make contact or handle an application. Its list of warning signs includes being asked:

• for a myGov sign-in and password, or banking sign-in details
• for identity documents such as Medicare card details or a Centrelink Customer Reference Number
• to download software, to transfer money, or to open a bank account with a particular provider

For anyone who thinks they have been caught, the scheme’s steps are to stop contact, block and report the account on social media, report the scam (it points to Scamwatch), call the bank or card provider quickly, and change passwords.