A no interest loan was a life saver for Western Sydney single mum Rosetta Ianchello, when her newly bought car "died" after only a few days.
"Everything went wrong for me," Ms Ianchello told the ABC.
The last thing Ms Ianchello needed was spending more money on her new car when the cost of essentials from petrol to the weekly shop were already ballooning.
She changed her shopping schedule to make the most of the items on sale.
"I don't go shopping on weekends. For example, I go Tuesday, Wednesday nights after 7pm. I find products are 60 per cent cheaper for me or someone like myself," she said.
She approached bank after bank for a loan without success.
"The only way I was thinking was to go to Cash Converters, because they do lend money on high interest," she said.
It was by chance someone mentioned the no interest loans offered by charity organisation Good Shepherd, financed through the National Australia Bank (NAB).
"I didn't know anything about [no interest loans], I was too embarrassed asking people can I borrow money … [it] came out of nowhere, and helped me out."
Nationwide data shows Ms Ianchello is one of many Australians turning to the no interest loans scheme (NILs) as the cost of living crisis forces people to seek help from local community providers.
Earlier this year, Australia recorded its highest inflation in over a decade, and in the past year consumer prices jumped 6.1 per cent, the most since June 2001.
Research from Deakin University's Institute for Health Transformation in July found just how much essential grocery items had risen.
Data shows over the last year the cost of lettuce rose 150 per cent, broccoli jumped up by $5 and tomatoes increased by 25 per cent.
No interest loans are almost unique to Australia, according to Fiona Guthrie, CEO of Financial Counselling Australia.
The loans are interest free and paid back through instalments.
Ms Guthrie describes the scheme as a wonderful Australian invention.
"There is no other loan scheme like NILs anywhere else in the world," she said.
"Financial counsellors are working with people who often don't have enough money, and being able to access a no interest loan can be life changing."
Good Shepherd created the no interest loan scheme in the early 1980s but it wasn't until 2003 they partnered with NAB for help with financing the loans.
NAB spokesperson Michael Chambers said the loans had adapted over the years, and expanded to include education and medical costs, car registrations and repairs as well as rental deposits.
The standard no interest loans increased from $1,500 to $2,000 on July 14.
"We think it is really important that Australians do have access to credit, particularly people on low or no income who may not have access to other types of credit," Mr Chambers told the ABC.
"And no interest loans are actually a really sustainable way for customers to get access to money to buy essential household goods, when they otherwise may not be able to get more traditional credit products."
No other banks in Australia offer no interest loans outside of NAB, which is something Ms Guthrie believes should change.
"It would be a really good thing to see more of the banks offering these kinds of loans," she said.
"Because if you think about it, banks and the offering of credit are so fundamental to giving people access to products they may not be able to get.
"We don't want people going and getting harmful products such as payday loans."
Referral services and providers have noticed a rise in the number of people wanting to access NILs loans.
Tairyn Vergara, CEO of Western Sydney based Parks Community Network, believes people would not have given her organisation a second thought before the pandemic and the increased cost of living.
"So it's really heartbreaking to see that people who were OK financially prior to the pandemic are no longer," Ms Vergara told the ABC.
During the last financial year, her community centre offered over 300 loans, up more than 10 per cent on the previous financial year.
"[It] created this new group of the working poor in our community, who now need to access our organisation and our services," Ms Vergara said.
"Basically it's a choice to pay bills or to eat. Like that's how desperate people are getting basically because there's just not enough income, whether they're on welfare payments or working."
Between January and July this year, NAB has seen a record high $27 million in loans, compared with $22.5 million during the same period in 2021.
"We think that's primarily down to a few things. So customers are borrowing a little bit more because of cost of living pressures," Mr Chambers said.
"But also there has been a no interest loan scheme for vehicle pilot program launch, which allows customers to also borrow up to $5,000."
The new program, NILS4CARS, started in September of last year.
It's been a welcome addition for Ms Vergara, who said car related loans currently represented 40 per cent of her organisation's output.
Ms Ianchello describes the staff at Good Shepherd as her guardian angels. She was afraid of falling back further in her finances before receiving her loan, or having to beg for some help.
She finally has some power to deal with her debt.
"Every two weeks [the money] comes out of my account with no interest and I'm breathing, and I'm okay now," she said.
"It just came out of nowhere and paid out all my debts."
