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Community Finance Low-income Loans

two women talking over paperwork

The Community Finance scheme offers affordable loans for approved people on low incomes (wage earners or benefit recipients). The scheme is a partnership between The Salvation Army, the Ministry of Social Development, Bank of New Zealand and Good Shepherd NZ.

The purpose of the Community Finance scheme is to provide sustainable borrowing for those on low incomes in a way that supports employment outcomes, helps families effectively manage debt, builds financial literacy, and helps loan customers improve their quality of life.

Loan applications are made through approved Salvation Army Community Finance centres, which then work with borrowers throughout the life of their loan, monitoring repayments and providing support and financial education.

What type of loans are there?

Two types of loans are available:

  1. No Interest Loan (NILS) of up to $1000 for a maximum of 18 months.
  2. Low-interest StepUP loans from $1000 to $5000 at 6.99% for a maximum of 36 months.

Both loans are free of fees. They have different lending criteria, including what the money is for and the customer’s financial position. The BNZ is providing the loan capital.  

Repayments are calculated to be affordable across the term of the loan for people on low incomes. High interest rates and unexpected penalty payments that can lead to unsustainable debt are not a feature of the Community Finance scheme.

Customers that find themselves struggling to repay their loan should contact their Salvation Army Community Finance representative immediately to discuss their options.

What can the loans be used for?

Depending on the type of loans, they can be used for essential household goods and services such as white goods, medical and health expenses, or higher cost assets such as motor vehicles. They can also be used for funeral costs.

The loans cannot be used to fund fines, bills or non-essential items such as holidays.

The loans cannot be used for debt consolidation.

The loans will not duplicate or replace existing assistance available from Work and Income.

Am I eligible for a loan?

You may be eligible to apply for a loan if you fulfil the following criteria:

  • have the ability to repay a loan
  • be on a low income (from work or benefits)
  • hold a Community Services Card
  • have lived at their current address continuously for at least the past three months.
  • be able to prove a willingness to repay.

More information

Visit the Good Shepherd website for more information on NILS and StepUp loans.