Not-for-profit organisation Good Shepherd today launched Household Relief Loans Without Interest for people impacted financially by COVID-19, in collaboration with the Australian Government and National Australia Bank.
The loans of up to $3,000 can go towards paying rent and utilities such as electricity bills, with the money paid directly to the landlord or utility company rather than cash-in-hand to the consumer.
There are no credit checks conducted in the application process for the Household Relief loan.
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 could apply to take out another of these loans if required. But only one loan could be given per person at a time.
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.”
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The Household Relief loan can also be used in conjunction with Good Shepherd’s No Interest Loan Scheme (NILS), which has been around since the 1980s and provides individuals and families with access to safe, fair and affordable credit to pay for essentials such as car repairs or medical procedures for 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 – that’s the criteria for a single seeking a NILS loan.”
Am I eligible for a Household Relief 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 at least 18 years old
- are an Australian citizen, permanent resident, or hold a valid visa that expires after the loan term
- 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
- have either lost your job, had income reduced (including if you’re self-employed), moved onto Centrelink payments after March 2020 or been otherwise financially impacted by Covid-19
There’s a test online for the Household Relief loan which takes about two minutes to determine a person’s eligibility to secure the rent and utility assistance.
Am I eligible for a No Interest Loan Scheme loan?
As for the NILS, to get one of these loans you must:
- have either a Health Care Card, a Pensioner Concession Card or an income less than $45,000 per year after tax (or $60,000 for couples or people with dependants)
- have lived at your current or most recent address for more than three months
- be able to show that you can repay the loan.
The table below displays some of our referral partners’ unsecured personal loan products for a three-year loan amount of $20,000 in NSW. The products are sorted by Star Rating (highest to lowest) followed by comparison rate (lowest to highest). Use Canstar’s personal loan comparison selector to view a wider range of products on Canstar’s database. Canstar may earn a fee for referrals. Read the Comparison Rate Warning.
You might also find the following reads helpful:
- Coronavirus finance help: Home loan, super, savings and term deposits
- Home insurers offering financial relief during COVID-19
- Car insurers offering financial relief during COVID-19
- Health funds offering financial relief during COVID-19