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.

Can I apply for a quick loan online?

While some lenders will require you to provide paperwork in person, many lenders will allow you to make an application for quick personal loan online. You’ll still need to provide information on your identity, income, and loan purpose in most cases.

Can I repay a $3000 personal loan early?

If you receive a financial windfall (e.g. tax refund, inheritance, bonus), using some of this money to make extra repayments onto your personal loan or medium amount loan could help reduce the total interest you’re charged on your loan, or help clear your debt ahead of schedule.

Check your loan’s terms and conditions before paying extra onto your loan, as some lenders charge fees for making extra repayments, or early exit fees for clearing your debt ahead of the agreed term.

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 can quick loans be used for?

Many borrowers use quick loans to cover short-term or urgent costs, such as paying for car repairs, medical bills, or replacing broken appliances or electronics. Quick loans often have high interest rates compared with regular personal loans.

Before applying for a quick loan, consider your other available options, such as working out a payment plan or applying for an advance or extension. 

Can you pay off a quick loan early?

Many lenders will allow you to make extra repayments onto a quick personal loan when you can afford them, or even exit the loan early, which can help reduce the total interest you are charged. Be sure to check your quick loan’s terms and conditions, as some lenders charge early exit fees for paying off a loan ahead of schedule.

Can you refinance a $5000 personal loan?

Much like home loans, many personal loans can be refinanced. This is where you replace your current personal loan with another personal loan, often from another lender and at a lower interest rate. Switching personal loans may let you enjoy more affordable repayments, or useful features and benefits.

If you have a $5000 personal loan as well as other debts, you may be able to use a debt consolidations personal loan to combine these debts into one, potentially saving you money and simplifying your repayments.

How can I get a $3000 loan approved?

Responsible lenders don’t have guaranteed approval for personal loans and medium amount loans, as the lender will want to check that you can afford the loan repayments on your current income without ending up in financial hardship.

Having a good credit score can increase the likelihood of your personal loan application being approved. Bad credit borrowers who opt for a medium amount loan with no credit checks may need to prove they can afford the repayments on their current income. Centrelink payments may not count, so you should check with the lender prior to making an application.

Are there emergency loans with no credit checks?

While many personal loans require a credit check as part of the application process, some personal loans and payday loans have no credit checks, which may appeal to some borrowers with a bad credit score.

Keep in mind that even if a loan is available with no credit check, the lender will likely want to confirm that you can afford the repayments on your current income.