Payday loans up to $1,200
Most $1,200 loans are a form of payday loan as they are small, short term loans. $1,200 payday loans are usually repayable within 16-60 days. Potential borrowers should be aware that these loans come with high costs attached, including the maximum establishment and monthly fees allowed by the Australian Securities and Investments Commission (ASIC). Due to the expense, these sorts of loans may be inadvisable if they can be avoided, but can be used in cases of financial emergency. Depending on the eligibility of the borrower, there are some lower cost options available for $1,200 finance.
Are you struggling financially?
If you're struggling financially and would like to speak to someone for free financial advice, information and assistance you can call the Financial Counsellors hotline on 1800 007 007 (open from 9:30am to 4pm, Monday to Friday). If you are suffering financial problems related to the coronavirus pandemic you may be eligible for additional support. Find out more here: https://www.finder.com.au/coronavirus-financial-help
⚠️ Warning about Borrowing
Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
- For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
- Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
- If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
$1,200 loan options
If an applicant has bad credit
Sunshine Short Term Loans
- Loan Amount: $2,000
- Loan Term: 9-14 weeks
- Turnaround Time: 30 minutes - conditions apply
- Fees: 20% of loan amount + 4% of loan amount each month
- Bad credit borrowers OK
- Quick & easy Approval
Loan options are more limited when borrowers have bad credit. However, many payday lenders may still consider bad credit borrowers. Bad credit payday lenders will determine whether their customers can repay the loan on a case by case basis based on their proof of income (either through employment of Centrelink payments). While payday lenders may still lend money to people with negative marks on their credit records, prospective borrowers ought to be wary of lenders who claim not to check credit files at all. It is a requirement that all responsible lenders check credit scores as part of the process of determining whether their customers will be able to repay their loans.
Bad Credit Loan Options
If borrowers have good credit
There are more options available to borrowers if they have good credit. Borrowers who need money urgently, ask if their bank offers same day personal loans to existing customers. If this isn't something their bank offers, overdrafts can usually be set up with their transaction account within a day - giving them access to a line of credit. While they have the option of applying for a conventional personal loan, this will usually only be available for an amount upwards of $5,000.
If an applicant is eligible for a low or no interest loan
Low and no interest loans are essentially community financial assistance programs aimed at those receiving Centrelink payments or on lower incomes. Eligible applicants must:
- Have a health care card or pension card
- Have resided in your current premises for more than three months
- Show a willingness and capacity to repay
- Not be using the loan to pay rent, bills or for a holiday
The loan is designed to finance essentials. This includes household items like furniture, washing machines and fridges, some medical and dental services and also educational purchases including computers and textbooks.
How you can compare small loans
- Know the eligibility. Applicants may be eligible with some lenders and ineligible with others, so they need to check the minimum eligibility before they apply. Requirements need to be met for income, age and residency, and there may also be restrictions for those who receive Centrelink payments.
- Check what the fees will be. Lenders are capped as to how much they can charge you for a $1,200 short-term loan, so borrowers are likely to see similar fees across the board because payday lenders normally charge the maximum that they are able to. A breakdown of these fees is outlined in the section below.
- What are the repayments? While the repayment terms, such as how long they have to repay the loan, may vary, their repayments will usually be structured according to the frequency of their pay. Make sure that these repayments fit within the budget.
What are the risks of payday loans?
- Unaffordable repayments. Payday loans are an expensive way to borrow money and should only be used as a last resort. Check the size of each repayment and ensure you will be able to pay it on time. Unaffordable repayments can lead to late fees that will only make things worse.
- High rates and fees. Rates and fees on payday loans are high but there are rules in place so be sure to check your lender is not charging you more than ASIC allows. Also, look at what you would be charged if you are late on a payment or if you default on the loan altogether.
- Unreputable lenders. All Australian lenders should be accredited by ASIC. Check for a credit licence on the ASIC Register and ensure that the lender is easily contactable.
- Impact on credit score. Every loan application shows up on credit reports. While lenders might not consider credit history, applying for lots of loans within a short period can have a negative impact on your credit score in the future.
The costs of borrowing $1,200
Lenders are restricted as to how much they can charge for a $1,200 loan. Restrictions apply when the lender is a non-Authorised Deposit-taking Institution (ADI) which excludes banks, credit unions and building societies. The loan has to be under $2,000 and needs to be repaid within terms of 16 days to one year.
If the loan meets these requirements, the lender cannot charge more than 20% of the principal loan amount as an establishment fee and 4% of the principal loan amount as a monthly fee.
For a loan of $1,200 borrowed for a one-month term, customers will pay $1488 in total with two fortnightly repayments of $744.
Questions about $1,200 loans answered
Can I apply for a loan if I receive Centrelink payments?
Yes. Many lenders offer Centrelink loans to applicants who show they will be able to manage the repayments. Review the eligibility criteria outlined in the review pages before you apply to see what requirements you will need to meet.
When will I receive my loan?
This differs between lenders. Usually, if you submit your application and accept your loan contract before 2:30pm on a business day, you can receive your loan amount on that same day.
How do I make repayments?
Your lender will outline this in your loan contract. However, you loan amount will normally be direct debited from the bank account your loan was deposited into upon the agreed upon dates.
I won’t have enough money to cover my repayment. What do I do?
The first step is to get in touch with your lender – this may save you a late fee or a direct debit dishonour fee. Your lender may be able to set up a payment plan or delay your repayment for you. If you are concerned about being able to meet repayments prior to submitting a loan application, it might benefit you to contact the Financial Counsellors hotline on 1800 007 007. Lines are open Monday-Friday 4.30pm-5pm and are free of charge.
When can I apply for another loan?
It is important to note that payday loans aren’t designed to be a long-term financial solution. If you do need to apply for another loan you will need to have repaid your first loan in full before applying. You can apply with your original lender or find a different lender.
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