If you want to take out a payday loan, you may find that you’re unable to provide 90 days of banking history. This could be because you’ve recently changed bank accounts. You can still apply, provided you’re able to provide either statements from your old account or a combination of statements from your old and new account.
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.
⚠️ 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.
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Why do lenders require 90 days of bank statements?
Payday lenders, or short-term lenders, operate under various regulations meant to protect borrowers from predatory lending. These regulations have been put in place by the Australian Securities and Investments Commission (ASIC). Regulations cover factors such as loan terms (which can’t be less than 16 days) to how much lenders can charge in fees (maximum thresholds have been introduced). Lenders are also required to check 90 days of bank statements before approving loans. This is to ensure the borrower is financially stable and is able to comfortably repay their loan. Defaults can lead to high penalties and legal repercussions, so lenders are required to ensure their customers can afford the loan before approving them.
Can I get approved without providing 90 days of bank statements?
The short answer is no. ASIC requires all lenders to check their customer’s bank statements for the last 3 months. Any lender caught not complying will be risking their credit license. Avoid lenders that claim your bank statements are not required since they may be predatory. They could be looking to take advantage of borrowers who are facing financial difficulty and are vulnerable.
Can I get a payday loan if I’ve recently changed bank accounts?
If you recently changed accounts but need a payday loan, you can provide statements from your previous account. You could also provide a combination of statements from your new and previous bank account. Your statements need to demonstrate that you have the income to repay the loan. If you’re unsure if your statements are enough, you should contact the lender and seek clarification before submitting an application. They may be able to help you out.
Can I be approved for a payday loan with a savings account?
Lenders need to be able to see evidence of your income. Using a savings account to show transaction history is not an option. The same applies for debit cards as evidence of banking history. A general rule of thumb is that if your pay isn’t deposited in the account and you don’t use it as a transaction account, you can’t use it to get approval for a payday loan.
How can I submit my transaction account information?
To keep the application process efficient and fast, lenders have developed technologies to access read-only copies of your bank statements. During the application process, you’ll be asked to provide your internet banking login. This process is encrypted and lenders will only be able to access a read-only copy of your statements. None of your details will be stored and the lender will not have access to your account. They’ll only be able to see the statements to verify the information on them.
This process is standard and secure and is used by payday lenders and other alternative financial providers. You can read more about it here. If you don’t want to provide your internet banking login details, you can provide physical copies of your bank statements. This can make the process of approving your application longer as lenders will have to manually verify your statements.
What if I can’t provide 90 days of bank statements but need a loan anyway?
The best solution would be to wait until you have sufficient history or to borrow from friends and family. Keep in mind that any lender that offers a loan even if you have insufficient history may have a relaxed view of ASIC regulations. They may not be acting in your best interest and aren’t working within the framework meant to protect you. Before you apply with any lender, it’s best to check if they are registered with ASIC.
What details will I need to provide when applying for a payday loan?
Each lender will have their own criteria, and it can differ between lenders. Generally, you’ll need to be:
- At least 18 years of age.
- A permanent resident or citizen of Australia.
- Receiving a minimum income. You could include Centrelink payments, depending on the lender. However, your income from Centrelink can’t be more than 50% of your total income. You’ll need to provide your Centrelink details and receipts.
- Able to provide proof of identity. This can be a form of ID (driver's licence, proof of age card, Medicare card or passport).
- Be able to provide 90 days worth of bank statements.
- Be able to provide information on income and employment.
What are the risks of payday loans?
- High fees and charges and short terms. Payday loans come with high fees and charges. While these fees are regulated by ASIC, they are still expensive. You should check how much the loan costs, inclusive of interest and fees. Make sure you can repay the loan with ease before applying. Loans up to $2,000 charge 20% in establishment fees and 4% in monthly fees. Fees are capped and lenders can’t charge you more than ASIC allows.
- Short loan terms. Typically, payday loans come with short loan terms, ranging from 16 days to 1 year. Larger loans can have a term of 2 years or more. If you don’t repay the loan within this period, you could incur default fees, which can be up to 200% of what you borrowed. Short terms also means high monthly repayments. This could leave you out of pocket and cause financial hardship. If the loan doesn’t fit comfortably within your budget, you should reconsider.
- Disreputable lenders. Unfortunately, there are predatory lenders looking to take advantage of vulnerable borrowers. Check the lender's website and make sure it's a reputable company. You should ensure it’s registered with ASIC. It should also be easy to contact.
- Multiple applications. Every loan application shows up on credit reports. Some payday lenders may not consider your credit history. But several applications within a short period can have a negative impact on your credit score. This can make it harder for you to get a loan in the future.
- Long-term repercussions and legal issues. Once you sign a loan agreement, you’re bound to its conditions. You’ll have to pay the loan and all the fees and payments. Typically, payday loans are unsecured loans. This means that the lender can initiate legal proceedings against you if you do not repay the loan. It can also report the debt to a credit reporting body like Equifax and use the services of a debt collector.
How can I apply for a payday loan?
🤔 Work out how much you need to borrow and what you can afford.
🔎 Start comparing lenders. Apart from the services they offer, don't forget to compare interest rates and fees.
✅ Select a lender from the comparison table on this page. Click “go to site” to be directed to the lender’s page or “more info” if you want to read about the lender.
🖨️ Organise and prepare the required documentation.
📱 Apply. Most lenders have their applications online.