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Viva Payday Loans > No Interest Loans

No Interest Loans

Zero-interest loans are available in Australia under the No Interest Loan Scheme (NILS), established in 1981, and their outreach has been further expanded to around 600 locations by Good Shepherd Microfinance since 2012. 

The loans are provided for the benefit of low-income earners to help them make ends meet. For example, those people who do not own a refrigerator or a computer to aid education are facing unique challenges that can hamper their growth. The purpose of providing no-interest loans to Australians is to help them cover essential expenses without putting a dent in their monthly income. 

As the name implies, such loans do not carry any interest and borrowers are only liable to repay the principal amount of the loan. These loans are meant to be used by borrowers to pay for essential expenses such as the purchase of appliances, car repairs, medical procedures, etc. You can borrow a maximum of $1,500 under this loan scheme, to be repaid over a period of 12-18 months.

Tip: No-interest loans are a great alternative to expensive short term loan options such as payday loans, however, they have strict lending criteria. If you do not fall into the lower-income bracket of the population, there are high chances you would not be accepted for a no-interest loan.   

What Can You Use No Interest Loans For?

You can take out a no-interest loan to pay for the following expenses. 

  1. To buy necessary household items such as a refrigerator, a stove, a freezer, a washing machine, a heater, or any other item that falls within this category. 
  2. Any services sought for medical or dental purposes. 
  3. Purchase of educational material such as a laptop, textbooks, or tablets. 
  4. To pay for car repairs and similar expenditure. 

How It Works

The loans provided under NILS are kept in circulation, which means that repayments from one loan go into funding for another loan. The loan provider does not provide these loans for profit-making purposes. 

To apply for a NILS loan, you need to follow these steps. 

  1. Find out if you are eligible for a NILS loan. This can be done on the NILS website.. 
  2. To apply, you need to connect with a NILS provider near you. This can be done online on this link or over the phone by dialing 13 64 57. 
  3. Make an interview appointment at the NILS provider that is nearest to your residential address. Also, make sure to ask about any information/documentation you need to carry into the interview with you. 
  4. The loan provider will carefully evaluate your personal and financial circumstances to assess your eligibility for the loan. 
  5. Once the assessment has been made, the loan provider will notify the applicant with a decision. 
  6. Borrowers are expected to repay the loan over a period of 12-18 months. 

Eligibility Criteria

To qualify for an interest-free loan, you must:

  1. Have a pension or health card
  2. Have an after-tax annual income of less than $45,000 as an individual, or less than $60,000 for a couple or for those people who have dependents
  3. Have lived for at least 3 months at your current or past residential address
  4. Prove affordability for the loan as per the repayment terms and conditions

Tip: Interest-free loan providers usually don’t conduct a credit check of the borrower’s credit history, so your credit score is immaterial to the loan approval process. 

Alternative Options

In case you do not qualify for a NILS loan, there are other alternatives that you can possibly consider. 

Cash Advance Facility by Centrelink

If you are a recipient of Centrelink payments, you can always apply to have one of your future payments given out in advance. Such requests can be made at the Department of Human Services. However, only use this option in case of emergencies, as you would not be receiving the payment received in advance in the future which can potentially strain your personal cash flow. 

0% Promotional Schemes on Credit Cards

Some credit card providers are offering a grace period on debt accumulated on their credit card, during which borrowers would not be charged any interest on their credit card balance. You may consider this option, however, make sure you clear out all debt before the promotional period expires. Also, additional fees and charges might apply. 

Pension Loans Scheme

You may qualify for this option if you own home equity and are old enough to receive a pension. Such loans are given out by the government against your home equity. Although this option is not an interest-free one, the interest rate charged is still significantly lower compared to many other loan options. To apply, you need to get in touch with the Department of Human Services. 

Short Term Loans

There are many short term loan providers in Australia who offer loans such as payday loans and other loan types. However, many of them offer loans that are very expensive, hence, you must remain cautious before exercising this option. 


Can I use a NILS loan to make rental payments?

No, NILS loans cannot be used to pay your rent. 

Can I apply for a no-interest loan if I have a bad credit score?

Yes, an applicant’s credit history is not taken into consideration during the loan approval process. 

What documents do I require for the loan interview process?

While arranging the loan interview, you will also be informed about the documentation/information you need to bring into the interview. 

Is there any application or other charges associated with a no-interest loan?

No, the loan does not have any fees or charges. 

How long does it take to get a no-interest loan?

It takes approximately 45-90 minutes for the loan assessment, and the lender takes around 2 business days to deliver a verdict on your loan application (although approval may be given on the same day if all required paperwork is available during the assessment).