THOUSANDS more financially vulnerable people are set to get access to interest-free loans.
The Government is expanding its No-Interest Loan Scheme (NILS) to offer help to 20,000 people across the country.
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NILS offers credit of up to £2,000 to those who cannot afford the interest rates attached to other forms of standard loans.
In 2021, the government promised £3.8 million for the programme to help those who are vulnerable and prevent them falling into further debt.
Under the scheme, you only pay back what you’ve borrowed – unlike other loans where interest charges mean you pay back more than you borrowed.
The scheme was initially trialled in Manchester and other areas, and will now be rolled across the country due to its success.
NILS allows customers to take out one loan for between six and 18 months – the average borrowing period under the trial was 12 months.
And more people could be set to benefit from the scheme, as the Government will decide in two years’ time whether to expand it further.
You can apply for the scheme online.
To do so, you’ll need a copy of a recent bank statement in your name, dated within the last three months.
This can be a photo of a paper copy, or a digital statement if you’re able to download one from your online banking app as a PDF.
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You’ll also be asked to provide proof of benefits in the application – this must be a benefit statement dated within the last three months.
You’ll also require a Statement of Referral from a social worker, housing officer, a local food bank or NHS worker.
To be eligible for the scheme you must be:
- Over 18 years old
- Live locally for at least three months
- You must be able to repay the loan or be entitled to a grant
- You must be on a benefits scheme or receiving a local income
NILS can help you with the cost of essential household items including washing machines and refrigerators.
The loans can also help you with access to education or employment as you can put the cash towards transport costs, uniform and equipment.
It does not provide you help with purchasing mobile phones, televisions, carpets or any kind of gift.
Wales also runs a similar scheme for those who have fallen behind on their rent due to the Covid-19 pandemic.
Fair4All Finance is the body which partly runs NILS.
It was founded three years ago by the Treasury and the Department for Culture Media and Sport, with the aim to financially support those in vulnerable circumstances.
What other help can I get?
If you’re not eligible for NILS, there is other help you can get.
The Government has announced a package of measures to help households through the cost of living crisis.
Chancellor Rishi Sunak announced earlier this year that Brits will get up to £400 off their energy bills as part of a £21 billion cost of living bailout.
Additional payments will be given to those most vulnerable, pensioners or disabled. These payments are grants, not loans and therefore don’t need to be paid back.
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