Back-to-school expenses addressed via interest-fee loans: NAB

According to the big four bank, an increasing number of Australians are expected to seek ‘no interest loans’ to help cover back-to-school costs.

NAB is expecting to support “more than $450,000 worth” of no-interest education loans in February to help cover the cost of school essentials, “more than double the amount granted pre-pandemic”.

The total amount of money for education loans — used to pay for uniforms, books, stationery, and computers — has grown by more than 130 per cent between 2018 and 2022, NAB confirmed.

Head of customer vulnerability for NAB, Mike Chambers, said the start of the new school year was a particularly stressful time for some parents.

“January is often when the full impact of Christmas spending hits and, on top of this, parents are also faced with a list of back-to-school expenses they quickly have to meet,” Mr Chambers said.

“During the pandemic we saw a spike in no-interest loans to help meet the need for laptops and software for remote learning.

“With the cost of living on the rise, we expect to see even more families on low incomes looking to access no interest loans to help manage school costs.”

Unique, long-standing relationship

Mr Chambers confirmed that NAB had partnered with Good Shepherd for 20 years and was the only major bank offering a program that supported Australians on low incomes to access no interest credit.

“Often when faced with financial pressures people can panic and look for quick fix solutions like payday loans,” he said.

“It’s important for anyone struggling financially to know there is help available, whether that be through NAB or organisations like Good Shepherd.”

Good Shepherd’s director of client services, Dave Vicary, said that NILs were an excellent way of helping Australians manage their household budgets.

“With the rising cost of fuel, food and energy prices, we know how much of a financial burden the new school year can be, especially when you’re already on a tight budget,” Mr Vicary said.

“That’s why we are proud to partner with NAB to offer safe, fair, and affordable credit options through No Interest Loans.

“There are no hidden fees or charges – you only pay back what you borrow.”

Seeking out the Good Shepard

As explained by Good Shepard, No Interest Loans (NILs) are “a smart loan option” to help borrowers manage their money. 

The organisation said successful applicants would “borrow up to $3,000 for essential goods and services with no fees, no interest, and no charges, ever.”

That is, a borrowers only pays back what they borrow.

While loans can’t be used for cash, bills or debts, Good Shepard confirms its NILs, in general, can cover the following essential good and services: household essentials like whitegoods and furniture; housing - repairs, rent in advance, bond, relocation & utilities (by exception); car repairs and registration; assistance devices; medical and dental expenses; technology like a phone or laptop; bond and moving expenses; and education expenses.

To qualify you must: be 17 or over; have a heath care card / pension card or earn less than $70,000 gross annual income as a single; or earn $100,000 gross annual income as a couple or people with dependents; or have experienced family and domestic Violence (withing the last 10 years); or you can show that you have the capacity to repay the loan.

Additionally, you must be an Australian citizen or a permanent resident living in Australia, or have a visa for the term of the loan living in Australia.

[Related: ‘Rate shock’ spikes borrower concerns]