There will come a time for almost everyone when they need to take out a loan. There are a number of different loan options available. Which ones you have access to depends on your personal circumstances. One option you may have is that of a no-interest personal loan.
If you are on a small fixed income or are currently in financial distress then you may be able to take out an interest-free personal loan in Australia. These loans will only be for a small amount of money but they are a great option if an unexpected emergency happens.
Interest-free personal loans will typically be for an amount between $300 and $1,200. They are for individuals and families that fall under certain criteria. When you take out an interest-free personal loan you will only have to pay back the principal balance on the amount that was borrowed in the first place.
Interest-free personal loans are offered by Good Shepherd Microfinance and are offered as a part of the No Interest Loans Scheme (NILS). These kind of loans are typically used to make a purchase you might have been otherwise unable to afford.
Good Shepherd works with community organisations to provide these loans to more impoverished families by setting aside funding to finance them. When one borrower pays back their loan, the money they return is offered to another family that needs it. These loans have no fees or interest applied to them and the loan can be paid back within 12 to 18 months, meaning there is little for a borrower to worry about.
Find out more about personal loans for people on Centrelink.
These loans should only be used for people to make necessary purchases. Lenders who offer these loans will ensure that you have no other option before approving you for this kind of loan. The kind of things you can buy using these loans household appliances such as a fridge and freezer, medical and dental payments, things necessary for education such as buying a computer or text books, and other essential items.
The loan amount that you can apply for is between $300 and $1,200. If you really need more money than that you can apply for a low-interest StepUP loan through Good Shepherd. The loans are offered through NAB and you can increase your borrowing amount to up to $3,000.
You may not have to repay as much but you will still have to repay money on time. Take a look at the terms and the different repayment options available to you to ensure you will be able to repay the loan on time.
There are some criteria that you need to meet in order to apply for an interest-free personal loan:
There are a number of credit cards that offer you 0% introductory rates on purcahses. You can find comparisons for some of these below. Just remember that you will need good credit to apply for a credit card.
If you don’t meet the criteria for a no-interest personal loan then you still have options. These options include:
If you are a recipient of Centrelink payments and you find you need money in an emergency you can apply to have some money forwarded to you in advance. Contact the Department of Human Services to learn more about Centrelink cash advances.
If you are currently receiving a pension and have equity in real estate then you can consider a pension loans scheme. The loan will have an interest rate, but this rate will be much lower than the rate you will see on regular personal loans. This is another scheme offered through the Department of Human Services.
Short term loans can be taken out by people who are recipients of Centrelink benefits, people who are unemployed, and people who have bad credit. When you need money in a hurry you can take a look at the different payday loan options to find a loan that fits with your needs.