No-interest loans for people affected by the COVID-19 pandemic

If you have been affected financially by the ongoing COVID-19 pandemic, you may be able to apply for a $3,000 no-interest loan to help out with urgent household expenses.

While Australia has reopened to the world and the era of lockdowns appears to be behind us, we are still living with the COVID-19 pandemic, and it may be the case that you are experiencing financial difficulty as a result.

If so, you may be eligible to apply for a Household Relief No Interest Loan from Good Shepherd, to help with some of the cost of living.

What are Good Shepherd Household Relief No Interest Loans?

In July 2020, not-for-profit organisation Good Shepherd launched its Household Relief Loans Without Interest program for people financially impacted by COVID-19. The scheme is a collaboration with the Australian Government and National Australia Bank (NAB).

The loans of up to $3,000 can be used towards rent and utilities, such as electricity bills, as well as to pay a bond, body corporate fees or council rates. There are no credit checks conducted in the application process, and if your application is successful, the money will be paid directly to your landlord or utility company.

The borrowed amount can be repaid over two years without any interest or fees charged, according to Good Shepherd, and once it is repaid, people can apply to take out another loan, if required. Only one loan per person is available at a time and eligibility criteria apply.

A Household Relief loan can help get you back on your feet

Canstar money expert Effie Zahos said consumers who have already received some kind of flexibility in repayments or hardship assistance from their landlord or utility provider after suffering financial hardship due to COVID-19 might find the Household Relief loan a good next step to help them get back on their feet.

“If you owe any money on your electricity bill, most providers do have a hardship relief program and tenants and landlords may be able to negotiate what you’re going to pay,” Ms Zahos said.

“Where this loan comes in handy is if you’ve come to the end of that relief and you’ve got to pay that money back to get the monkey off your back.

“It’s a great alternative because there’s no interest and you’re able to buy yourself some more time.”

Household Relief Loans can be used alongside other loans

The Household Relief No Interest Loan can be used in conjunction with Good Shepherd’s No Interest Loan Scheme (NILS). This scheme, which was established in the 1980s, exists to provide individuals and families with access to safe, fair and affordable credit to pay for essentials such as car repairs or certain medical procedures, up to $1,500.

“Technically you could apply for both a Household Relief Loan and NILS loan and receive in total $4,500 interest-free,” Ms Zahos said.

“Of course, you would have to meet the eligibility requirements for both and be able to serve the loans.

“Servicing a debt of this size may not be feasible on an income of $45,000 a year,” she said, noting that this is the criteria for a single person seeking an NILS loan.

Am I eligible for a Household Relief No Interest Loan?

The $3,000 Household Relief loan requires people to meet a range of eligibility criteria. Specifically, Good Shepherd’s website advises you can only receive the loan if you:

• are aged at least 16 years or over;
• have lost your job, had income reduced, moved on to Centrelink payments after February 2020 or been otherwise financially impacted by COVID-19 (including reduced income if you’re self-employed);
• are an Australian citizen, permanent resident, or hold a valid visa that expires after the loan term; and
• have a before-tax annual income of less than $60,000 if you are single, or less than $100,000 for couples or people with dependents.

You can check your eligibility and apply online for a Household Relief loan if you are in need of assistance.

Am I eligible for a No Interest Loan Scheme loan?

To be eligible for a NILS loan, you must:

• have a Health Care Card/Pensioner Card or earn less than $45,000 a year after tax ($60,000 for couples or people with dependants);
• have lived at your current or previous address for at least three months; and
• show that you can repay the loan.

According to MoneySmart, the repayment term for a loan is between 12 and 18 months, and there are no credit checks..

Original article by Ellie McLachlan.

Cover image source: KieferPix/Shutterstock.com