For those experiencing financial hardship, credit may often seem like the only option when times are tough.

Credit cards and payday loans are fraught with danger, and those in a bad way financially often have a poor credit score which can prevent them from getting a personal loan.

However, there are alternatives, such as no-interest loans. No-interest loans can help those struggling to pay for expenses without sending them into a debt spiral. So how do they work?


In the market for a new car? The table below features car loans with some of the lowest interest rates on the market.

Lender

FixedNew1 year
More details
Approval within 24 hoursEarly payout available
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
Approval within 24 hoursEarly payout available

New Car Loan - Special (Fixed)

  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew1 year
More details
Approval within 24 hours
  • Save the planet. Save thousands on your car loan.
  • Get a discounted rate if you buy electric
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
Approval within 24 hours

Green Car Loan Fixed

  • Save the planet. Save thousands on your car loan.
  • Get a discounted rate if you buy electric
  • Required: Good credit history, stable employment history. Aus citizenship or PR.
FixedNew99 years
More details
Loan amounts from $2k to $75k
  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
Loan amounts from $2k to $75k

New Car Loan

  • Available for any new motorised vehicle
  • No ongoing or early exit fees
  • 1-7 years loan terms. Pay monthly, fortnightly, or weekly
  • Get quick decision. Funds in 24 hrs if approved
VariableNew1 year
More details

New / Demo Car Loan (Variable)

    FixedNew1 year
    More details

    New / Demo Car Loan (Fixed)

      FixedNew, Used99 years
      More details

      New or Used Car Loan Special

        FixedNew, Used7 years
        More details
        No ongoing fees
        No ongoing fees

        Plenti Car Loan (Refinance)

          FixedNew, Used99 years
          More details

          Unsecured Car Loan Excellent Credit

            FixedNew5 years
            More details

            Fixed Car Loan (New)

              FixedNew, Used7 years
              More details

              Secured Car Loan

                VariableNew, Used10 years
                More details

                Car Loan

                  FixedNew, Used99 years
                  More details

                  Car Loan

                    Important Information and Comparison Rate Warning

                    All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

                    The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates for car loans and secured personal loans for the relevant amounts and terms are for secured loans unless indicated otherwise. The comparison rates for unsecured personal loans are applicable for unsecured loans only. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

                    Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of April 16, 2024. View disclaimer.


                    What is a no interest loan

                    The No Interest Loan Scheme (NILS) is an initiative of Good Shepherd Microfinance, supported by the Australian Government and NAB. The scheme allows people to access up to $1,500 for essential goods and services to be repaid over 12 to 18 months with no interest and zero fees attached.

                    There is no credit check required when applying and the loans are available via 160 different community organisations in 628 locations across the country. Launched in 2003, the scheme is aimed at keeping vulnerable households away from predatory lending products and getting them ahead of their debt, which helps contribute to the country’s economic growth as a whole.

                    Since its inception, almost 185,000 no-interest loans have been approved, with a value of $329 million. The average loan amount is $904, 68% of the loan recipients are women, 22% of clients identify as Aboriginal or Torres Strait Islander people, and 95% of the loans are fully repaid.

                    The NILS works on a good faith system through a process called ‘circular community credit’. When one borrower makes a repayment, the funds become available to someone else who needs them.


                    Who is eligible for a no interest loan?

                    To be eligible for a no interest loan you must:

                    • Have a Health Care Card or Pension Card, or earn less than $45,000 a year after tax as a single, or $60,000 as a couple or people with dependents,

                    • Have lived at your current or previous address for at least three months,

                    • Show evidence you have the capacity to repay the loan.


                    What can and can’t you buy with a no interest loan?

                    NILS loans can be used for:

                    • Household items, e.g. washing machines, fridges, furniture.

                    • Some medical and dental services.

                    • Educational resources, e.g. textbooks, laptops.

                    • Car repairs, maintenance, and registration.

                    The idea is NILS loans aren’t used as an emergency fund to cover emergency or frivolous spending.

                    NILS loans can’t be used for:

                    • Rent

                    • Bills

                    • Food and drink

                    • Debt repayments

                    • Cash


                    How do you apply for a no interest loan?

                    You can apply for a NILS loan through these simple steps:

                    1. Check your eligibility: You can do this by heading to the NILS website and ticking off eligibility requirements like having a Health Care Card and showing evidence you can repay the loan.

                    2. Get in touch: You can find your nearest NILS provider through the NILS website or call 13 64 57 to make an appointment with your nearest provider.

                    3. Assessment: Your appointment with your provider will go through your application and assess the length of your loan and what your repayments will be. This typically takes between 45 and 90 minutes.

                    4. Approval: If you bring all the necessary paperwork to your appointment you may be approved on the same day. If not, approval typically takes no more than two days. You will then receive a cheque with your loan amount, made out to the supplier you need to pay.


                    What other options are there?

                    If a NILS loan isn’t for you, there are other options:

                    A StepUp loan

                    A StepUp is a low-interest loan with no fees, where you can borrow $800 to $3,000. It has a fixed interest rate of 5.99% and must be repaid in three years in weekly, fortnightly or monthly repayments. It can be used for everything a NILS loan can, as well as a secondhand car.

                    To be eligible you must:

                    • Have a Health Care Card or Pensioner Concession Card, or be receiving Family Tax Benefit A,

                    • Have lived at your current address for more than three months.

                    To apply, you can visit the StepUp loan website or call your local StepUp provider to arrange an appointment. They’ll work through your application, ensure you have the capacity to make repayments and work out what they may be. Once approved, you’ll have to visit a NAB branch (who fund the scheme) to sign off on the loan contract. You’ll then receive the cheque made to the supplier you need to pay.

                    A personal loan

                    If you need to borrow a larger amount you may look at getting a personal loan. A personal loan is typically for amounts greater than $5,000 and less than $100,000, usually repaid over five to seven years. Keep in mind you typically need a good credit score to get a personal loan and you will face more stringent criteria from a lender, including regarding what the money is for. Personal loans are also likely to have much higher interest rates than a StepUp loan and you will have to pay a minimum repayment each month, dependent on the lender.


                    Savings.com.au’s two cents

                    NILS loans can be a lifesaver for those struggling financially and are likely to be a far safer alternative to payday loans.

                    Although there is no interest rate, you should ensure you can afford to make repayments over the period of the loan so as to not get yourself into further financial trouble.

                    Photo by Scott Rodgerson on Unsplash