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

Are there any interest-free emergency loans?

The No Interest Loans Scheme (NILS) allows low-income borrowers to take out no-interest loans for up to $1500 to purchase essential goods and services.

There are also similar low-interest loan schemes available to borrowers in financial hardship who are having a tough time getting finance approved.

Are there low doc personal loans?

Self-employed borrowers may be eligible for low doc personal loans, which require less documentation in their application process than many other personal loan options.

It’s important to remember that though low doc personal loans may require less paperwork, you may need to provide additional security, or pay a higher interest rate.

Can I get a no credit check personal loan?

Personal loans with no credit checks are available and called ‘payday loans’. These are sometimes used as short-term solutions for cash-strapped Australians. They often carry higher interest rates and fees than regular personal loans, and individuals risk putting themselves into a worsened cycle of debt.

How long are $3000 loans?

Medium amount loans can be repaid between 16 days and 2 years. Many personal loans have terms between 1 year and 5 years, though some are as short as 6 months while others last for 10 years.

Generally, the shorter a loan’s term, the more expensive your regular repayments may be, but the less total interest you’ll pay. Loans with longer terms mean more affordable repayments, but more interest charges over the full term.

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 interest rates are charged for personal loans?

Lenders aren’t allowed to charge interest on loans of $2,000 and under. Instead, they make their money by charging a one-off establishment fee of up to 20 per cent and a monthly account-keeping fee of up to four per cent. Lenders might also ask you to pay a government fee.

For loans between $2,001 and $5,000, lenders can make their money in only two ways: a one-off fee of $400 and annual interest rates of up to 48 per cent.

For loans of $5,001 and above, or for loans that have terms longer than two years, lenders can charge annual interest rates of up to 48 per cent.

Those fee caps don’t apply to loans offered by authorised deposit-taking institutions such as banks, building societies or credit unions, although such institutions are highly unlikely to charge interest rates of anywhere near 48 per cent.

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.

Where can I get a personal loan?

The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:

There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.

What is the average interest rate on personal loans for single parents?

Like other types of personal loans, the average interest rate for personal loans for single parents changes regularly, as lenders add, remove, and vary their loan offers. The interest rate you’ll receive may depend on a range of different factors, including your loan amount, loan term, security, income, and credit score.

What are the pros and cons of personal loans?

The advantages of personal loans are that they’re easier to obtain than mortgages and usually have lower interest rates than credit cards.

One disadvantage with personal loans is that you have to go through a formal application process, unlike when you borrow money on your credit card. Another disadvantage is that you’ll be charged a higher interest rate than if you borrowed the money as part of a mortgage.

Can I get a $4000 personal loan if I’m unemployed or on Centrelink?

Before most providers of personal loans or medium amount loans will approve an application, they’ll want to know you can afford the loan’s repayments on your current income without ending up in financial stress. Several lenders don’t count Centrelink benefits when assessing a borrower’s income for this purpose, so these borrowers may find it more difficult to be approved for a loan.

If you’re unemployed, self-employed, or if more than 50% of your income come from Centrelink, consider contacting a potential lender before applying to find out whether they accept borrowers on Centrelink.

Can I get a fast loan with bad credit?

Some lenders offer fast loans to borrowers with bad credit. Providers of small payday loans of up to $2000 or medium amount loans of up to $5000 may have no credit checks, though these lenders will usually want to confirm you can afford its loans on your income.

What are the pros and cons of bad credit personal loans?

In some instances, bad credit personal loans can help people with bad credit history to consolidate their debts, which can help make it easier for them to clear those debts. This is because the borrower might be able to consolidate several debts with higher interest rates (such as credit card loans) into one single debt with a lower interest rate and potentially fewer fees.

However, this strategy can backfire if the borrower spends the loaned funds instead of using it to repay the new loan. Another disadvantage of bad credit personal loans is that they have higher interest rates than regular personal loans.

What do single parents need for a personal loan application?

Much like applying for other personal loans, applying for personal loans for single parents will likely require the following:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of assets (e.g. car, home)
  • Details of liabilities (e.g. credit cards, other loans)
  • Loan amount
  • Loan term