Understanding No Interest Loans in Australia with NILs

17/02/2026

Understanding No Interest Loans in Australia with NILs

Need an essential item but can’t afford the upfront cost? True no interest loans exist in Australia, where you repay only what you borrow — with no interest, no fees, and no charges.

For Australians on low incomes, covering essentials like a fridge, washing machine, medical treatment or car repairs can be extremely difficult. Many people feel pushed toward payday loans or credit cards, which can quickly become expensive and stressful.¹

This guide explains how no interest loans in Australia really work through the No Interest Loan Scheme (NILs), who qualifies, what you can use them for, and how to apply step by step.

We’ll also clarify the difference between genuine NILs and commercial “interest-free” deals, and explain where Credit24 fits as an alternative for people who don’t qualify or need larger loan amounts.

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What are no interest loans and how do they work?

No interest loans are small loans provided through the No Interest Loan Scheme (NILs), operated nationally by Good Shepherd Australia in partnership with more than 250 community organisations.²

What makes NILs different?

Unlike commercial interest-free offers:

No interest is charged
No fees of any kind
No penalties
No hidden costs

You repay exactly what you borrow — nothing more.

Key features of the no interest loan scheme:

Loans of up to $2,000 for essentials
Up to $3,000 for specific needs (such as housing-related costs)
Up to $5,000 under the NILs for Vehicles program
Repayment periods up to 24 months (or up to 48 months for vehicles)
No credit check for standard NILs
Not cash loans — money is paid directly to approved suppliers
Financial support and budgeting help included

This structure is designed to reduce financial stress while helping people access essential goods and services.³

Who qualifies for interest free loans in Australia?

Eligibility for interest free loans in Australia is based on income and personal circumstances.

Income thresholds

You may qualify if you earn:

Up to $70,000 before tax (single)
Up to $100,000 before tax (couples or families)

There is no income limit for people who have experienced family or domestic violence within the past 10 years.⁴

Centrelink and pensioners

You may be eligible if you receive Centrelink payments and hold:

A Health Care Card
A Pensioner Concession Card

This includes:

Age Pension
Disability Support Pension
JobSeeker
Parenting Payment
Carer Payment

There is no discrimination based on income source, which makes no interest loans Centrelink-friendly and suitable for pensioners.⁵

Other eligibility requirements

You’ll usually need to:

Be 18 years or older
Live at your current address for 3+ months (exceptions may apply)
Be an Australian resident
Show capacity and willingness to repay
Have no existing NILs loan (one loan at a time policy)

What can you use interest free personal loans for?

NILs are strictly for essential goods and services.

Essential household items

You can use interest free personal loans for:

Fridges, washing machines, dryers
Beds, mattresses, essential furniture
Basic household appliances
Laptops or computers (up to $2,000)
Mobile phones or tablets (up to $1,000)

These items are considered essential for safe and functional living.⁶

Medical and health expenses

Interest free medical loans in Australia may cover:

Dental treatment
Medical procedures not covered by Medicare
Glasses and hearing aids
Mobility aids
Mental health support services

Vehicle and transport costs

Under the NILs for Vehicles program:

Loans between $2,000 and $5,000
For reliable transport needed for work or caring responsibilities
Vehicles must be registered and roadworthy
No recreational or luxury vehicles

You can also use NILs for:

Essential car repairs
Registration in some circumstances

Housing and education expenses

NILs may also cover:

Rental bond or rent in advance (up to $3,000)
Council rates (case-by-case)
Natural disaster recovery costs
School uniforms, fees and education equipment

What you cannot use NILs for

NILs cannot be used for:

Paying bills or existing debts
Cash withdrawals
Business or investment purposes
Holidays or entertainment
Purchases from family or friends

How to apply for no interest loans – step by step

1. Find a provider

You can:

Call Good Shepherd on 13 64 57
Use their online provider finder (650+ locations nationwide)

A local community organisation will manage your application.⁷

2. Gather the needed documentation

You’ll usually need:

100 points of ID (licence, passport, Medicare card)
Proof of income (Centrelink statement or payslips)
Recent bank statements
A quote or invoice from the supplier
Basic information about existing debts

3. Start the application

The process includes:

Initial phone eligibility check
Appointment with a NILs worker (phone or in person)
Supportive financial assessment
Completing the application together

Approvals may take around two business days once documents are submitted, although timeframes can vary depending on the provider and your circumstances.

4. After approval

Once approved:

Funds are paid directly to the supplier
A repayment plan is set up
Payments are usually automatic
Flexible support may be available if circumstances change

Tips for managing your no interest loan

Even though there’s no interest, it’s still important to plan ahead:

Budget for repayments
Set up automatic payments
Contact your provider early if you’re struggling
Use the financial counselling support offered
Plan for life after the loan ends

Helpful:
https://www.credit24.com.au/blog/how-to-track-expenses
https://www.credit24.com.au/blog/how-to-budget-and-save-money-on-a-low-income
https://www.credit24.com.au/blog/how-to-do-a-budget

What if you don’t qualify for NILs?

Not everyone meets the eligibility rules, and sometimes the amount available may not match what you need. In those cases, it may help to compare other options carefully.

Credit unions and mutual banks

Some credit unions and mutual banks may offer low-cost community loans with flexible terms.

Microfinance organisations

Local charities may run small community lending programs.

Employer salary advance schemes

Some employers offer structured, low-cost advances. If available, it may be worth reviewing the terms carefully to understand any fees or repayment requirements.

Credit24 personal loans

If you:

Earn above NILs thresholds
Need more than $3,000
Need access to funds sooner

Credit24 offers personal loans from $500 to $10,000, with fixed repayments and transparent fees.

Depending on your circumstances, a personal loan may be one way to cover essential costs, but it’s important to compare the total cost and ensure repayments fit within your budget.

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Frequently Asked Questions

Are no interest loans really free?

NILs loans charge no interest, no fees and no penalties. You generally repay only what you borrow, but it’s still important to confirm repayment terms and conditions with your provider.

Can I get interest free loans on Centrelink?

Many Centrelink recipients may qualify, particularly if they hold a Health Care Card or Pensioner Concession Card.

How long do no interest loans take to approve?

Many applications may be approved within around two business days once documents are submitted, although processing times can vary.

Can I get multiple no interest loans?

Generally, NILs providers allow only one NILs loan at a time, meaning you usually need to finish repaying an existing loan before applying again.

What’s the difference between NILs and commercial interest-free deals?

NILs loans do not charge fees or revert to interest. Some commercial interest-free offers may include account fees, late payment fees, or high interest if conditions aren’t met.

Do no interest loans affect credit scores?

Standard NILs loans do not typically involve a credit check. However, it’s always worth confirming with the provider if you are unsure.

Can I get a no interest loan for a car?

Yes, through the NILs for Vehicles program, subject to eligibility and program conditions.

What if I can’t repay my no interest loan?

If you’re struggling, it’s important to contact your NILs provider early. They may be able to discuss alternative arrangements or support options.

For more support and guidance, you can also read:
https://www.credit24.com.au/blog/financial-hardship

Sources

¹ ASIC MoneySmart – Loans and Financial Hardship
https://moneysmart.gov.au

² Good Shepherd Australia – No Interest Loan Scheme
https://goodshep.org.au

³ Australian Government – Microfinance and NILs
https://moneysmart.gov.au/loans/no-interest-loans

⁴ Good Shepherd – Family and Domestic Violence Support
https://goodshep.org.au

⁵ Services Australia – Concession Cards
https://www.servicesaustralia.gov.au

⁶ MoneySmart – Borrowing for Essentials
https://moneysmart.gov.au

⁷ Good Shepherd – Find a NILs Provider
https://goodshep.org.au

Disclaimer

IPF Digital Australia Pty Ltd, trading as Credit24, ABN 59 130 894 405. Australian Credit Licence 422839.

The information in this article is general in nature and does not consider your objectives, financial situation, or needs. Lending criteria, fees, and charges apply. For product details, eligibility requirements, and full terms and conditions, visit www.credit24.com.au.

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