What microcredit means in the Australian setting
In Australia, small-sum lending for people on low incomes is delivered mainly by non-profit and community organisations. The best known is the No Interest Loan Scheme, usually shortened to NILS, run by Good Shepherd Australia New Zealand through a network of local providers.
The National Debt Helpline notes that more than 250 local community organisations deliver these loans, and that the helpline itself does not provide them.
Other organisations also run small-loan programs in some areas, and their terms differ. Always confirm the details with the provider, since eligibility, amounts and timing are set locally.
Who can apply
You need one of the following: a Health Care Card or Pension Card, income below $70,000 before tax as a single person, or below $100,000 with a partner or dependants, or experience of family or domestic violence in the last 10 years.
You must also show that you can afford the repayments, and have lived at your current address for at least three months, with exceptions in some situations. Providers may add their own checks.
Couples are assessed on a combined basis for the higher income threshold, so be ready to explain who in the household earns what. If your circumstances change after approval, such as starting work, let the provider know and discuss the repayment schedule.
What a loan can pay for
Loans are generally up to $2,000 for goods and services such as appliances, furniture, car repairs and registration, medical and dental costs, a computer or phone, education costs, and equipment or licences for work. Phones and tablets have lower caps.
A rental bond or natural disaster recovery can reach $3,000. Vehicle loans are a separate category, with higher limits and a credit check.
What it cannot pay for
A no-interest loan is never paid to you as cash, and it cannot cover rent, rates, bills or existing debts. Providers may exclude other items too. The Salvation Army, for instance, lists used cars among things it does not fund.
The money goes straight to the seller against an invoice. If you have not chosen the item yet, you can ask about pre-approval and send the invoice later.
The application, step by step
Find an accredited provider through the Good Shepherd provider finder, or call 13 64 57. Be ready with identification, bank statements, payslips or Centrelink statements, and a simple budget.
You will usually need a quote or invoice for the item, and details of any existing debts. Decisions at some providers come within a couple of days, though timing varies.
- Proof of identity
- Recent bank and income statements
- A budget of regular expenses
- A supplier quote or invoice
Cost and repayment
Good Shepherd states that there is no interest and no fees on a No Interest Loan. Repayments can run up to 24 months for goods and up to 48 months for vehicles.
Repayments are usually set from your regular income, so they should be affordable. Missing them can still affect your ability to borrow from the scheme again, so contact the provider early if something changes.
Scams, imitation sites and other options
Moneysmart warns that unofficial websites and social media accounts offering no-interest loans may be scams. Use the official provider finder, and never pay a fee to receive a loan.
If a no-interest loan does not fit, other routes include Services Australia's advance payment for those who qualify, state bond loans for rental bonds, and free advice from the National Debt Helpline.
Example: a laptop for an interview
Suppose someone has secured a job interview and needs a laptop to complete an online assessment. A no-interest loan could finance a basic computer, paid straight to the retailer, with repayments spread over a period that matches their income.
The same person could instead use a credit card at a high interest rate, which would cost more over the same period. The scheme is designed to avoid that kind of extra cost.
This example is illustrative only. Whether a particular loan is approved depends on the provider, the item and your finances.
Frequently asked questions
Is there any interest or fee on a No Interest Loan?
No. Good Shepherd states there is no interest or fees on these loans. You repay only what you borrowed, over a set period, although other costs, such as the item's delivery, are a separate matter between you and the seller.
Is a credit check required?
Not for standard loans, according to Good Shepherd. Vehicle loans do require a credit check. Providers still ask for proof that you can afford the repayments, so a budget and income statements are needed.
Can I use the money for my bills?
No. The loan cannot be taken as cash or used for bills, rent, rates or debts. It is paid directly to a supplier for a specific item or service, based on an invoice or quote.
How do I avoid fake offers?
Only use the Good Shepherd provider finder or an organisation you can confirm, such as The Salvation Army. Treat any request for an upfront fee, or a social media message promising a loan, as a warning sign.
Useful organisations and links
- The Salvation Army – No Interest Loan SchemeInterest-free loans for essentials, with documents needed, exclusions and typical turnaround.
- Moneysmart – No interest loansGovernment explanation of eligibility, limits and how to avoid unofficial websites.
Links to third-party organisations with no commercial tie to this site. Always check the conditions with them directly.