
Get exclusive money-saving offers and guides
Straight to your inbox
Updated
We’re reader-supported and may be paid when you visit links to partner sites. We don’t compare all products in the market, but we’re working on it!
Short-term lenders, also called payday lenders, operate under various regulations out in place to protect borrowers. These regulations have been put in place by the Australian Securities and Investments Commission (ASIC) and cover various factors, from how long the loan terms need to be (a minimum of 16 days) to how much lenders can charge in fees. Another requirement is that lenders must check 90 days of bank account statements from their applicants in order to determine their eligibility. According to ASIC, this condition means the lender can ensure if someone is in a stable financial situation and that they will be able to comfortably repay the loan.
However, not everyone has 90 days of banking history, particularly if they've just changed accounts. For prospective payday loan applicants in this situation, find out what to do in this guide.
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
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:
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.
The specific information required varies between lenders, but generally applicants will need to provide the following:
The short answer is no. ASIC requires all lenders to check the last three months of statements from anyone looking to be approved for a loan, and any lender caught not doing this will be risking its credit licence. Prospective applicants should avoid any lender that offers approval without this requirement, as it indicates a relaxed view towards ASIC's regulations, which are put in place to protect borrowers. Lenders who do not adhere to these regulations may be disreputable and looking to take advantage of people facing financial difficulty.
For customers who have changed banks very recently, they can provide statements from their previous bank or a combination of statements from their previous bank and their current bank. Applicants should make sure these statements show the necessary income amount as stipulated by the lender with which they apply, as indicated on their application. If someone is unsure about whether the statements will be sufficient, they should check directly with the lender before submitting an application.
Lenders need to be able to see evidence of an applicant's income, so using a savings account to show transaction history is not an option. The same goes for people looking to use debit cards as evidence of their banking history. A general rule of thumb is if their pay is not deposited in the account and they don't use it for regular transactions (i.e. it doesn't operate as a transaction account), then they won't be able to use it to be approved for a payday loan.
In order to keep the application process efficient, lenders have developed technologies to access and read bank statements automatically. During the application process, applicants will be asked to give their Internet banking logins so the lender can access a read-only copy of their banking statements. None of their transaction history will be stored and the lender will not have access to their account – they will only be able to see statements to verify the information on them. The entire process is secure and is standard practice for payday lenders and many other alternative finance providers.
How payday lenders use your Internet banking logins
Picture: Shutterstock
A UCapital unsecured business loan can provide up to $300,000 without security, with repayment terms between 3 and 12 months.
A new partnership between digital bank 86 400 and Mortgage Choice aims to deliver unconditional home approval within as little as two hours – can it really happen?
Pepper Money is an Aussie non-bank lender that offers a vast range of personal loans and home loans to customers Australia-wide. Find out more here.
The BankSA Vertigo Platinum card offers a $300 cashback a low ongoing purchase rate and a range of complimentary insurance covers.
Find out more about Pepper Money's no fee personal loan and benefit from a competitive rate from 6.95% p.a., zero fees and loan terms of up to 7 years.
Whatever your business loan requirement, ebroker may be able to help. With a range of loan options from over 70 bank and non-bank lenders compared on-site, could you find the right loan for your business?
Get rewarded for an excellent credit score with a Now Finance personalised rate secured personal loan. Rates vary between 5.95% p.a. and 15.45% p.a. Apply today.
nmoni is an Australian lender that offers personal loans to both good and bad credit applicants. Find out more about nmoni's rates, fees and features.
Looking to finance your business's growth and development? A fixed term loan from Macquarie Bank could help.
The MOVE Bank Low Rate card offers 0% p.a. on balance transfers for 6 months and 8.99% p.a. on new purchases – plus it is a member-owned bank.