TRANSCRIPT
"Day to day life is a struggle with the cost of living going through the roof and it is disheartening knowing there are things I can't provide my kids with."
Kate is a single mother of three living in Melbourne.
She says her life was changed for the better when she discovered something called a no interest loan.
"I have so far got a vacuum, TV for the boys for Christmas. My daughter got a tablet. I got a dryer. A lot of white goods is stuff I wouldn't be able to afford to get on my own. I would've just had to go without or not been able to get certain things for the kids, which makes you feel a bit low and sad knowing that you can't. But the opportunity that NILS [[no interest loans]] provides families, it's just happiness."
So, what is a no interest loan?
NAB Executive for Sustainability Jessica Forrest explains.
"No interest loan is a great option for people who need to cover essential items. So essentially through Good Shepherd, customers can get low amounts of credit, so that's up to $2,000 for essential items or $3,000 if they need support for bond or rent in advance. And essentially there's no fees or charges at all associated with the loan. There's also zero interest. So as opposed to a personal loan or a credit card that they might access through commercial credit or through Buy now, pay later, or pay day lenders, there is zero interest."
The no interest loan offering is a government-led initiative supported by one of Australia's big banks and not-for-profit organisation Good Shepherd.
It was established in 1981 by Good Shepherd - and can be accessed at 550 locations nationally through 120 community providers like the Salvation Army.
Ms Forrest says in the last 12 months, it's being utilised by more families than individuals.
"Traditionally, we've seen the no interest loans primarily taken up by individuals, but now more and more we're seeing families turning to no interest loans for a solution. And the reason that families are looking for this kind of support is really for household essentials as well as vehicle and transport costs. So, these are the essential items for every household, but they're also really important to maintain access to employment and income. So, if you don't have a car or you unable to cover transport costs, then people can find themselves in even more challenging situation with loss of income. So, it does enable that continued access to income."
The loans are used to support the purchase of basics such as fridges, medical bills, cars or computers, with customers only paying back the amount borrowed in small, regular payments.
More no interest loans were issued to people aged between 35 and 39 than any other age group in the last year.
And General Manager of Service Navigation and Support at Good Shepherd, Kong Le says they've recently made it easier for more people to access the loan.
"We've recently given, I guess the rising cost of living, have actually expanded our eligibility criteria to allow those individuals who earn $70,000 or less to be able to access the no interest loans. For couples or people with dependents it's up to $100,000 per year. For people who have experienced family and domestic violence they can access no interest loans as well, or people who have a pension or healthcare card that has access to this product services as well."
And amid a national domestic violence crisis, Kong Le says anyone experiencing family violence can access a no interest loan without needing to meet any other eligibility criteria.
"In terms of the actual service offering, what we've found through our data is that it assists I guess the most benefit comes from assisting people who are on the recovery journey. What we found is that people, survivor victims who have or are in the crisis stage have got access to other services which are more beneficial to them. So, it's more around, I guess, the recovery stage that we're assisting family and domestic violence survivors with. But it's also us leveraging of our partnerships with community networks who we work with about organisations to deliver these services to them."
