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Interest free loans in New Zealand

No interest personal loans can help Kiwis in financial distress by offering safe and affordable credit.

If you earn a low income, it can be difficult to find the money to afford even the most basic goods and services, let alone when unexpected bills come up. And if you don’t meet the minimum lending criteria set out by banks for personal loans, accessing the money you need can be a challenge. However, it’s this challenge that the No Interest Loan Scheme (NILS) helps overcome.

An initiative of Good Shepherd New Zealand, the NILS provides low-income earners access to interest-free personal loans, allowing them fair and affordable financing. Let’s take a closer look at how interest-free personal loans work and how they might be able to help you.

How does an interest-free personal loan work?

The loans offered by Good Shepherd New Zealand are part of the No Interest Loans Scheme (NILS). These interest-free personal loans let you purchase essential items you cannot otherwise afford.

Community organisations, such as The Salvation Army, work in partnership with Good Shepherd New Zealand. They provide interest-free loans to disadvantaged families by having a set amount of funding available. As one borrower pays off their loan, those funds are then allocated to another needy family. There are no fees or interest charges to worry about, and each recipient is usually given 12 months to pay back the principal loan amount.

Are you eligible for interest-free personal loans?

You need to meet a few criteria to be eligible for an interest-free personal loan:

  • Have a Community Services Card
  • Be on a low income. Please email to see if you qualify.
  • Have lived at your current address for at least three months
  • Show a willingness and the capacity to repay the loan

There are no credit checks required during the loan application process. Instead, interest-free personal loans are given on the basis of trust and respect.

What can I use an interest-free personal loan for?

NILS loans are only available for the purchase of essential items and services, including:

  • Household items such as fridges, freezers, stoves, washing machines, dryers and furniture
  • Cars
  • Some medical and dental services
  • Essential educational items, such as computers and textbooks
  • Other items and services as requested

How does the lending process work?

NILS works on a system of circular community credit, which means when you make a repayment on your interest-free personal loan, those funds are then made available to someone else in the community.

You can apply for a NILS loan by following a few simple steps:

  1. Enquire about interest-free personal loans online through the NILS website This allows you to determine whether you are eligible for a loan.
  2. Attend an interview with a NILS loan provider in your local area. You will find the location of NILS providers on the website.
  3. Your loan application is assessed.
  4. You are informed about the outcome of your loan application. If successful, you will then agree on repayment terms.
  5. Use the funds to pay for essential services or household items.
  6. Repay the loan amount over 12 months.

Are there any alternatives?

If you don’t meet the eligibility criteria necessary to qualify for a NILS loan, there are other options available to help you access the finance you need:

  • Work and Income cash advance. If you receive Work and Income payments and need emergency funding, you can apply to have a payment made in advance. Contact Work and Income on 0800 559 009 to see if you qualify.
  • Work and Income Emergency Payments. In certain circumstances, you may qualify for an additional payment from Work and Income. For example, a Temporary Additional Support payment, to cover essential living costs if you don’t have sufficient income. There is also a Special Needs Grant to help you pay for an item you have no other means of paying for. This payment does not normally need to be paid back. Contact Work and Income to see if you qualify for an emergency payment.
  • Short-term loans. Short-term loans may be available for people who receive Work and Income benefits; to those who are unemployed and even people with bad credit. You may also want to compare payday loan options if you are in need of quick financing.

Compare alternatives to interest free loans

Name Product Interest Rate (p.a.) Min. Loan Amount Max. Loan Amount Loan Term Monthly Service Fee Establishment Fee
The Lending People Personal Loan
6.95% - 26.95%
1 to 7 years
$0 - $10 depending on lender
$50 to $695 depending on lender
Eligibility: Be 18+, an NZ citizen or permanent resident, in employment and earning at least $500 per week.
Secured and unsecured loans of up to $75,000 from a variety of reputable lenders.
Harmoney Unsecured Personal Loan
6.99% - 19.99%
3 or 5 years
Eligibility: Be a NZ resident/citizen and have a good credit score.
Apply for an unsecured personal loan up to $70,000 with no early repayment fees.
FROM 6.99%
The Co-operative Bank Unsecured Personal Loan
6.99% - 19.99%
6 months to 5 years
Eligibility: Be 18+, an NZ citizen/permanent resident, or have a valid work visa.
Floating-rate, unsecured personal loans from $3,000.
Lending Crowd Personal Loan
5.03% -19.30%
2, 3 or 5 years
$200 - $1,450 depending on the amount borrowed
Eligibility: Be a NZ resident/citizen and have a good credit score.
Secured and unsecured personal loans from $2,000 to $200,000. 100% online with no paperwork or early repayment fees.
Nectar Unsecured Personal Loan
8.95% - 29.95%
6 months to 4 years
Eligibility: Must be 18+, an NZ citizen or permanent resident, have an income of $400 per week or more (after tax) and a stable credit history.
Unsecured loans from $1,000 with payouts made within one day of approval. Applications entirely online.
Save My Bacon Unsecured Flex Loan
8 - 52 weeks
Eligibility: Be 18 or over, have an income of at least $400 per week and be a NZ citizen, permanent resident or have a valid work visa.
Medium-term unsecured loans from $1,000 to $5,000 with no hidden fees.
ANZ Personal Loan
6 months to 7 years
BNZ Advanced Personal Loan
12.65% (students/graduates) - 17.85% (standard)
3 months to 5 years
Max Loans Secured Personal Loan
6.99% - 29.95%
1 - 7 years
$0 to $10 depending on lender
$195 to $1,500 depending on lender
Eligibility: Be 18+, an NZ citizen/permanent resident, and have an income of least $400 per week.
Kiwibank Unsecured Personal Loan
13.95% - 18.95%
6 months to 7 years
$240, $0 for Graduate Pack customers
Eligibility: Be 18+, an NZ citizen/permanent resident, and have a stable income. Ts&Cs apply.
Unsecured personal loans from $2,000
MyFinance Secured Personal Loan
13.95% - 24.95%
Up to 5 years
$250-$450 depending on loan size
Secured personal loans from $1,000 with competitive interest rates. Eligibility: Be 18+ and an NZ resident
Gem Secured Personal Loan
6.99% -18.99%
6 months to 7 years
Eligibility: Be 18+, a permanent NZ resident and earning a stable income.
Secured personal loans for those with an excellent credit history. Weekly, fortnightly or monthly repayment schedules and no fees for early repayment.
ASB Personal Loan
Up to 7 years

Compare up to 4 providers

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