NAB commits to helping low income Australians

NAB commits to helping low income Australians

One hundred thousand no and low interest rate personal loans will be provided to low income Australians by NAB. 

The move comes as part of the bank’s ambition to “improve the financial wellbeing of its customers and communities.” 

NAB has allocated $130 million for microfinance products alongside Good Shepherd Microfinance, providing 26,000 loans to low income Australians over the past 14 years. 

Now NAB have set a target of 100,000 loans within two years. 

NAB Chief Executive Officer, Andrew Thorburn, said the bank wanted to “better understand the issue of financial resilience and how it could do more to help.” 

“These loans are for items such as a second-hand car, fridge or washing machines – items that can seem small but they make a big difference.” 

“Banks are central to the lives of Australians, including assisting them with some of the most important decisions they will make such as buying a home or starting a business. 

“That’s why we have committed through our partnership with Good Shepherd Microfinance to provide 100,000 loans annually to low income Australians within two years. 

“We are proud that through our long-standing partnership with Good Shepherd Microfinance, we’ve provided more than $212 million in no and low interest loans to over half a million Australians who need support. 

“But as the research shows, there is more to be done and we are committed to helping,” said Mr Thorburn.

NAB research reveals Aussie financial insecurity 

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The big four bank’s commitment to low income Australians comes on the back of their research that found over 2.6 million Australians have no savings at all. 

This leaves them “unprepared for a financial shock, such as an unplanned medical expense.” 

Part 1 of Financial Resilience in Australia, research produced from a partnership with the Centre for Social Impact (CSI) at the University of New South Wales, has revealed the following: 

  • One in three (31 per cent) of Australians feel financially secure
  • Fewer Australians are prepared for ‘a rainy day’, with only half having savings equal to three or more months’ pay.
  • Australians are less financially resilient than in previous years, with over 2.4 million adults either severely or highly stressed about money than last year. 

Chief Executive Officer at CSI, Professor Kristy Muir, said it is “concerning to see that Australians are feeling less financially secure.” 

“Financial stress can have significant impacts on a person’s life. We know that a growing number of Australians are financially stressed and don’t have appropriate, affordable or accessible supports to help them survive a financial shock.

“It’s important that society has the right safeguards in place. 

“By understanding more about what Australians need to help them access appropriate and affordable supports, they will be better placed to withstand financial adversity, and better equipped to face and bounce back from adverse events,” said Professor Muir.

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Learn more about personal loans

How long will I have bad credit?

Most negative events that appear on a person’s credit file will stay in their credit history for up to seven years.

You may be able to improve your credit score by correcting errors in your credit report, clearing outstanding debts, and maintaining good financial habits over time.

What's a credit report?

A credit report is a record of your credit history, which covers your credit enquiries, borrowings and your repayments. The report will include information about any bankruptcies or other relevant legal judgements. It will also include biographical information such as your address, date of birth, driver's licence number and employment history. 

Do student personal loans require security?

While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, which typically have higher interest rates.

Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will fully or partially guarantee the loan, taking on the financial responsibility if the borrower defaults.

What is comprehensive credit reporting?

Comprehensive credit reporting is a system which includes both positive and negative information on a person’s credit file. Before comprehensive credit reporting was introduced, only negative information was included.

Will comprehensive credit reporting change my credit score?

Comprehensive credit reporting may change your credit score, either positively or negatively, depending on an individual's situation.

Under comprehensive credit reporting, credit providers will share more information, both positive and negative, about how you and other Australians manage credit products. That means credit reporting bureaus will be able to make a more thorough assessment of everyone’s credit behaviour. That will lead to higher scores for some consumers and lower scores for others.

What is a secured bad credit personal loan?

A bad credit personal loan is 'secured' when the borrower offers up an asset, such as a car or jewellery, as collateral or security. If the borrower fails to repay the loan, the lender can then seize the asset to recoup its losses.

When was comprehensive credit reporting introduced?

Comprehensive credit reporting was introduced to make credit reports fairer and more accurate. Under the previous system, credit providers only saw negative information about potential borrowers. Now, they're able to see both positive and negative information, which means that credit providers can see if a borrower’s negative credit behaviour is consistent or a mere one-off.

What causes bad credit ratings/scores?

Failing to repay loans and bills will damage your credit score. So will falling behind on your repayments. Your credit score will also suffer if you apply for credit too often or have credit applications rejected.

Which lenders offer bad credit personal loans?

Several dozen lenders offer bad credit personal loans in Australia. These are generally smaller lenders that aren’t household names.

Do $4000 loans have no credit checks?

Many medium amount loans for $4000 have no credit checks and are instead assessed based on your current ability to repay the loan, rather than by looking at your credit history. While these loans can appear attractive to bad credit borrowers, it’s important to remember that they often have high fees and can be costlier than other options.

Personal loans for $4000 are more likely to have longer loan terms and will require a credit check as part of the application process. Bad credit borrowers may see their $4000 loan applications declined or have to pay higher interest rates than good credit borrowers.

Are there $2000 emergency loans?

If you’re having trouble being approved for a loan of less than $2000 and urgently need to purchase household essentials, there may be emergency loan options available to you.

For example, the No Interest Loans Scheme (NILS) allows low-income borrowers to take out interest-free loans of up to $1500 for essential goods and services.

For further assistance, consider contacting a financial counsellor, or calling the National Debt Helpline on 1300 007 007

What is an unsecured bad credit personal loan?

A bad credit personal loan is ‘unsecured’ when the borrower doesn’t offer up an asset, such as a car or jewellery, as collateral or security. Lenders generally charge higher interest rates on unsecured loans than secured loans.

How can I improve my credit rating/score?

Your credit score will improve if you demonstrate that you’ve become more credit-worthy. You can do that by minimising loan applications, clearing up defaults and paying bills on time.

Another tip is to get the one free credit report you’re entitled to each year – that way, you’ll be able to identify and fix any errors.

If you want to fix an error, the first thing you should do is speak with the credit reporting body, which may take care of the problem or contact credit providers on your behalf.

The next step would be to contact your credit provider. If that doesn’t work, you can refer the matter to the credit provider’s independent dispute resolution scheme, which would be the Australian Financial Complaints Authority (AFCA).

AFCA provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints.

If that doesn’t work, your final options are to contact the Privacy Commissioner and then the Office of the Information Commissioner.

Can single mothers get personal loans online?

Many lenders offer online applications for personal loans, which can be convenient for borrowers who have busy lives. If you’re not confident your personal loan application will be approved, you may want to consider contacting the lender by email, live chat, phone, or by visiting a branch, to discuss your situation before applying.