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$3k loan lifelines to help survive the cost-of-living crisis

Don't just reach for the credit card, look into these interest-free loans first.

Composite image of a worried mother holding her baby, and hands holding open an empty wallet, to signify need for a loan.
Free loan lifelines are available to Aussies who need it most. (Source: Getty)

This is part one of a two-part series on the free loan lifelines available to struggling Aussies right now. Part two will focus on the cheapest options to replace a car when you don’t have the money.

Aussies are now accruing interest on the highest level of credit card debt since 2021. We collectively carry more than $17.77 billion and, given around 40 per cent of credit card holders ‘revolve’ their debt rather than repay it, Canstar estimates the average outstanding balance is $3,719.

Also by Nicole Pedersen-McKinnon:


But the thing is, if you are financially struggling, there are better ways to survive rather than reaching for the credit card.

How no-interest loans work

Although no-interest loans sound too good to be true, they are real and can rescue you when you need it most. Known more commonly as NILs, they are offered by microfinance organisation Good Shepherd, through a national network of financial counsellors you can access by contacting the National Debt Helpline (1800 007 007).

The idea of these loans is to give almost emergency assistance to low-income earners who find themselves in a sudden financial bind. You can’t use the money for cash, bills or debts, and NILs will pay it directly to a supplier or vendor.

So, for medical or dental expenses, if your washing machine breaks, you need a new laptop for work or for a child at school, you face a big car repair bill… even if you can’t cover the cost of your registration right now, such a loan could give you a lifeline.

As the website says: “Unexpected expenses are bound to pop up from time to time. NILs help you manage your money.”

It’s for essentials like appliances or furniture, to help you get your car back on the road, pay for education fees and equipment, or help you cover the cost of goods and services to support your well-being.

You can borrow up to $2,000 for such expenses, and up to $3,000 is available for housing-related costs – think bond or advance rent, council rates, or if you are in a natural disaster and need rapid financial relief.

The beauty of NILs is that they are interest-free, and there are no fees. The repayment of the money is over two years.

Who is eligible for NILs?

NILs are available for single people who earn less than $70,000 before tax or couples or single parents who earn less than $100,000. You will also be eligible if you hold a Health Care Card or Pension Concession Card or have experienced family or domestic violence in the past 10 years.

However, in any circumstance, you must be able to show you can afford to repay the loan. You’ll need 100 points of ID, bank statements, pay slips, or a current Centrelink statement and an estimate of your regular expenses. They will want to know details of your existing debts, including buy now, pay later, payday loans, or rent-to-buy contracts.

The final element is to provide a quote or invoice that shows the price and supplier details of whatever the loan is for. If you don’t have this information yet, pre-approval is possible. Remember, the money can only be paid directly to a supplier.

There are no credit checks – the website explains: “We don’t judge you on your history.”

The calculations are instead based on your current financial affairs - that is, your money in, your money out, the total loan amount, and your repayment time frame. And NILs could give you interest-free, fee-free breathing space.

In part two of this series on the loan lifelines available right now, the cheapest options to replace a car when you don’t have the money.

Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at Follow Nicole on Facebook, Twitter and Instagram.

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