Loads of people who are on low incomes, have bad credit and/or are financially struggling often resort to small amount loans when needing finance. As the name suggests, these loans allow people to borrow small sums of money, usually quickly or instantly. While it may seem like a convenient fix to cash shortages, there are many disadvantages to this type of borrowing, namely the high cost or high interest rate that comes with such loans.

This is where the No Interest Loan Scheme (NILS) comes in. NILS allows people in a financial pinch access to safe and affordable credit. In certain situations, it could be a smarter alternative to a high-cost small loan.

How much can I borrow? ILS allows people to borrow between $300 and $1200 worth of credit.

What can I use it on? This cannot be borrowed in cash, and can only be used on essential goods and services. While some might consider this a bit of a downer, it can work to the borrower’s benefit. This restriction prevents the temptation to spend the credit on non-essentials or have the borrower form an unhelpful dependency on it. Here are a few handy examples:

NILS can be used on:
•Household essentials such as washing machines, stoves, furniture, and microwaves.
•Educational goods like computers and textbooks.
•Some dental and medical services.
•Car repairs.

But not:
•Bills (for example, electrical or water).
•Rent.
•Holidays (sorry, Hawaii might have to wait).

What will it cost?

NILS loans are free of interest and fees.

How are repayments set up?

Borrowers have between 12 and 18 months to repay the loan.

What do I need?

To qualify, you must have a health care card or pension card, have been a resident in your current home for more than three months, and show a capacity and willingness to repay the loans.

Well? What are we waiting for?

The NILS home page has all the information you need on how to apply and where your nearest NILS providers can be found.

Of course, NILS is only intended as a short-term solution for when you’re in a bit of a tight spot. When it comes to getting financed for something trickier like a home loan, it’s a whole different ball game.

You can contact a Smartline Mortgage Adviser on 13 14 97 for home loan advice. Or complete our call request form and we’ll call you!

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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.