More than 42,000 no-interest loans have been issued in the past year by Good Shepherd and NAB, up 19% from the previous year, as Australians face cost-of-living pressures.
Significantly, the number of families using NAB and Good Shepherd’s No Interest Loans Program (NILs) to meet expenses has risen in the past 12 months, overtaking individual use.
NAB partners with Good Shepherd to provide loans with no interest and no fees to Australians on low incomes, people with healthcare or pension cards, or anyone who has experienced domestic and family violence in the past decade.
No-interest loans are designed for individuals earning less than $70,000 before tax ($100,000 for families) or those with a healthcare or pension card, or who have experienced family or domestic violence in the last 10 years.
The loans support the purchase of essentials such as fridges, medical bills, cars, or computers, with customers only repaying the borrowed amount in small, regular payments.
The No Interest Loans Program is funded by the federal and state governments, with capital funding by NAB and delivered by Good Shepherd Australia New Zealand.
Jessica Forrest, NAB executive for sustainability, highlighted the safety and simplicity of no-interest loans.
“Families who have never had to ask for financial help before are now seeking no-interest loans, often to help pay for unexpected costs or cover the cost of replacing an appliance that has suddenly stopped working,” Forrest said in a media release.
“For some, meeting the increases in their everyday expenses like rent and groceries has meant there is no longer an emergency fund available to cover the unexpected costs that arise.”
Kate, a single mother of three, shared how NILs have been crucial for her family.
“Currently, I live on a support pension and carer’s pension for my middle child. Financially, things are tough, and my rent has just gone up by $200 a month. That was a big shock,” she said.
Kate has used NILs three times over the past four years to help pay for her son’s school tablet, a washing machine, and a dryer.
“Without NILs I wouldn’t have been able to purchase the items. I could have maybe got used, cheap whitegoods and tech but I wanted the longevity of a new item and the benefit of having a warranty,” she said.
More than 1 million Australians have benefited from no-interest loans in the 20 years since NAB and Good Shepherd joined forces to provide the loans.
“No-interest loans don’t charge interest or have any fees and are a simple and secure way to help cover unplanned and unexpected expenses,” Forrest said.
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