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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.

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.

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.

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 do I need to get a fast loan?

Most lenders will need to you provide the following information in your application for a fast loan:

  • Proof of identity
  • Proof of residence
  • Proof of income
  • Details of any assets you own (e.g. car, home etc.)
  • Details of any liabilities you owe (other personal loans, credit cards, mortgages etc.)
  • How much you want to borrow
  • Over how long you want to pay it back
  • Purpose of your loan

Are there alternatives to $2000 loans?

If you need to borrow $2000 or less, alternatives to getting a personal loan or payday loan include using a credit card or the redraw facility of your home, car or personal loan.

Before you borrow $2000 on a credit card, remember that interest will continue being charged on what you owe until you clear your credit card balance. To minimise your interest, consider prioritising paying off your credit card.

Before you draw down $2000 in extra repayments from your home, car or personal loan using a redraw facility, note that fees and charges may apply, and drawing money from your loan may mean your loan will take longer to repay, costing you more in total interest.

Can you get an emergency loan on Centrelink?

When many lenders assess a borrower’s income to determine whether they can afford a loan’s repayments without ending up in financial stress, they may not count Centrelink payments as income for this purpose.

Before applying for an emergency loan, it may be worth contacting a potential lender to find out if they accept applications from borrowers on Centrelink.

Is it hard to improve your credit score?

It can be hard to improve your credit score, as it usually requires sacrifice and discipline, but hard doesn’t necessarily mean complicated. Some simple ways you can give your credit score a boost include closing extra credit cards, reducing your credit card limit, pay off any loans and make loan repayments on time.

As a general rule, the lower your credit score, the more remedies you can apply and the greater the scope for improvement.

Can I get a $2000 loan on Centrelink?

If more than half of your income comes from Centrelink benefits, it may be more difficult to have a $2000 loan application approved. Many lenders will check if you can afford a loan’s repayments on the income from your job before they’ll approve an application, and many won’t count Centrelink payments when assessing your income for this purpose.

Some lenders may offer $2000 loans to borrowers on Centrelink – consider contacting potential lenders to check before applying.

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.