No Interest Loans (NILS): How the Scheme Works
If a personal loan is out of reach right now, a No Interest Loan can be a safe, genuinely affordable way to cover an essential — with no interest and no fees. Here is who qualifies and how it works.
What is a No Interest Loan?
A No Interest Loan (NILS) lets eligible Australians borrow a small amount for essential goods and services with no interest, no fees, and no charges. You repay only what you borrow — nothing more.
NILS is not a commercial product. It is a not-for-profit scheme delivered by Good Shepherd and a network of local community providers, funded by the Australian Government and NAB. It exists to give people on low incomes access to safe credit, instead of being pushed toward payday lenders.
Who is eligible?
You may qualify for a NILS loan if you:
- Hold a Health Care Card or Pension Card, orearn under the provider's income threshold
- Have lived at your current or previous address for 3+ months
- Can show a reasonable capacity to repay the loan
Your credit score is not the barrier here. NILS does not require a good Equifax score, and a past default does not automatically disqualify you — which is exactly why it matters for people who have been knocked back elsewhere.
How much can you borrow, and what for?
NILS loans are for essential goods and services — typically up to around $2,000. Common uses include:
Typically covered
- Fridges, washing machines, essential appliances
- Car repairs and registration
- Medical and dental costs
- Education essentials (e.g. a laptop)
Not covered
- Rent or ongoing bills
- Cash in hand
- Debt consolidation
- Holidays or non-essentials
Exact loan limits and eligible items are set by each provider and can change. Always confirm the current amount on the official site before applying.
How to apply
- Find your nearest provider on the official No Interest Loans website (nils.com.au).
- Gather ID, proof of income or concession card, and a quote for the item.
- Have a short, supportive conversation with the provider about what you need and your budget.
- If approved, the provider pays the supplier directly and you repay over time.
You can also read the independent overview on ASIC's Moneysmart, which explains the scheme and links to providers.
Where NILS fits if a loan was declined
If an approval check returned Unlikely — needs improvement and you only need a modest amount for something essential, NILS is often a better path than a high-interest bad-credit loan or a payday loan. It buys you time to strengthen your profile without adding expensive debt. When you are ready to look at a personal loan again, the steps in why was I declined and getting a loan with an unpaid default explain what to fix first.
Not sure whether to borrow now or wait?
Check where your profile stands first. The approval likelihood calculator shows whether a personal loan is realistic yet — and what would move you up a tier.
Check my approval likelihood →Common questions
What is a No Interest Loan (NILS)?
A No Interest Loan (NILS) is a small loan for essential goods and services with no interest, no fees, and no charges — you repay only what you borrow. It is delivered by Good Shepherd and a network of community providers, and funded by the Australian Government and NAB. It is designed for people on low incomes who would otherwise struggle to access safe, affordable credit.
Who is eligible for a NILS loan?
Eligibility generally requires that you have a Health Care Card or Pension Card, or earn under a set income threshold; that you have lived at your current or previous address for at least three months; and that you can show a reasonable capacity to repay. You do not need a good credit score, and a past default does not automatically rule you out.
How much can I borrow with NILS and what can I use it for?
NILS loans are for essential goods and services — typically up to around $2,000 — such as fridges, washing machines, car repairs and registration, and medical or dental costs. Exact limits and eligible items are set by the provider, so check the current amount on the official site. NILS is not intended for rent, bills, cash, or debt consolidation.
Is NILS better than a personal loan if I have bad credit?
For a small, essential purchase, often yes. Because a NILS loan charges no interest and no fees, it is almost always cheaper than a payday loan or a high-rate bad-credit personal loan. If you received an Unlikely — needs improvement result from an approval check and only need a modest amount for essentials, NILS is worth exploring before any commercial loan.
Need more than NILS can offer?
If your need is larger, a specialist can talk through safe options for your situation.
Related guides
This is general information only and not financial advice. Results are indicative and may vary by lender.