Loans for unemployed people in New Zealand

The Community Finance Scheme exists to offer loans at an affordable price to unemployed and low income earners. The two options available are the No Interest Loan Scheme (NILS) and the Low Interest StepUP Loan. 

NILS. The No Interest Loan Scheme is run by Good Shepherd NZ and allows families on low incomes an opportunity to access affordable finance. There is no interest charged on these loans, you simply repay what you borrow. Loans of up to $1,000 are offered for the purchase of essential goods and services such as household goods, educational essentials, car expenses and some medical expenses. The borrower has up to 18 months to repay the money. 

To be eligible for a NILS loan you must:

• Qualify to receive a Community Services Card 
• Live in your current dwelling for no less than 3 months
• Be willing and capable to repay the loan

StepUP Loan. StepUP is a not-for-profit loan initiative for low or no income earners. It is provided by Good Shepherd NZ and BNZ and is also supported by the New Zealand Government. They offer fixed-interest loans at a low interest rate without any additional fees or charges. Loans from $1,000 to $5,000 are available with a low interest rate of 6.99% per annum. Repayments are calculated according to the borrowers budget and ability to repay and can have a generous term of up to 3 years. Like NILS, StepUP is to be used for essential goods and services only. 

To qualify you must:

• Be eligible for a Community Services Card
• Live at your current premises for no less than 3 months
• Be willing and capable to repay the loan

Other options. If you’re in need of a loan of a higher amount or for purposes outside of the essential goods and purposes list, there are other options available to you. There are many providers who will consider applicants who are unemployed and on government benefits. We are able to help borrowers find the best cash loans for their individual circumstances.  

Payday Loans or cash loans. The fees are high but the turnaround time can be as fast as one day. When small amounts of cash are needed fast, payday loans can be a useful option for applicants who are unemployed. 

Personal Loans. When you need to borrow larger sums, secured or unsecured personal loans can be offered to you if you are unemployed. The interest rate will be higher than if you had steady employment simply for the fact that the lender is taking on more risk by lending to someone who is not earning a wage. 

• Secured loans are backed by an asset–often a term deposit, vehicle, home or jewelery–used as security for if the borrower is unable to repay their loan.
• Unsecured loans are generally not available for loan amounts as high as secured loans and come with slightly higher interest rates due to the increased risk the lender is taking on by not having the loan secured by an asset to recoup their money if the borrower was unable to make their repayments.

The idea of borrowing money when you’re unemployed can be daunting but there are options to suit your needs. We work with people from all walks of life to ensure we do the utmost to help them find a loan to suit their needs.

Loans for beneficiaries in New Zealand

A "beneficiary" in New Zealand is someone receiving a Work and Income payment such as Jobseeker Support, Sole Parent Support, Supported Living Payment or NZ Superannuation. Being on a benefit does not stop you from qualifying for a loan – lenders look at your overall ability to afford repayments, not just the source of your income. That said, under the Credit Contracts and Consumer Finance Act (CCCFA), every lender must check affordability before approving a loan, no matter how the application is marketed.

Before applying with a private lender, check what Work and Income itself can offer. A beneficiary who needs money for an essential, unexpected cost can sometimes get a Work and Income advance payment or a Special Needs Grant, which does not carry any interest and is often faster to arrange than a commercial loan. The NILS and StepUP options described above are also open to most beneficiaries who hold a Community Services Card.

Bad credit and beneficiary loans – what actually gets approved

If you have bad credit as well as being on a benefit, your options narrow but do not disappear. Smaller unsecured loans and short-term cash loans are the most realistic path, since secured lending usually requires an asset such as a car. See our bad credit loans guide for how risk-based pricing works. Lenders that describe themselves as "direct lenders" skip the broker step and assess your application themselves, which can mean a faster decision, but it does not mean a looser one – responsible lending rules apply equally to brokers and direct lenders.

Why "guaranteed approval" and "no credit check" claims should make you cautious

No legitimate lender in New Zealand can lawfully guarantee approval before assessing your income, expenses and existing debts – see the explanation on our payday loans page. A lender who skips this step entirely is either breaching the CCCFA or not actually checking what it claims to check. Treat "guaranteed" or "instant approval, no checks" marketing as a red flag, and compare the lender against the Commerce Commission's register before signing anything.