Payday loan application guide

Payday loans are becoming increasingly popular in Australia, with more and more lenders on the market specialising in small, short-term loans. These lenders differ in their eligibility requirements and application processes, so here's a quick guide on how to find a lender and how to apply for a payday loan.

The application process:

Step 1: Compare lenders

Finding the right lender is the first important start of the application process. Review loan amount, fees, turnaround time and loan term to ensure you are applying for a loan that meets your needs.

Step 2: Review the eligibility criteria and required documents

Lenders vary on their application criteria and the information they need when you apply. Usually, you'll need to be over the age of 18 and receiving a regular income, but lenders will differ on where that income can come from (Centrelink, employment or a combination of the two) and what level of bad credit they will accept. For example, some lenders accept discharged bankrupts but others don't.

Generally, you will need to provide the following documents to apply for a payday loan:

• Documents to verify your identity such as your driver's licence or passport
• Your Internet banking details, which lenders use to access a read-only copy of the last 90 days' of your banking history
• Your employment details, including whether you are employed, how long you have worked there and the nature of that employment (full-time, part-time, etc.)
• Your income and expenses
• If you receive Centrelink payments, you will need to provide details of this and may need to provide Centrelink receipts
• You will need to indicate whether you have taken out a short-term loan in the last 90 days and whether this loan will be used to pay off another payday loan

Step 3: Approval

Lenders can usually let you know if you've been approved or not in a matter of minutes. This is because most lenders have a system approved your application rather than a human being. If more information is required in order to approve you, the lender will get in contact to get this information, but your application may be delayed.

Step 4: The contract

If you're approved, you need to agree to the loan contract before you are sent the funds. Many lenders do this by sending you an SMS or a copy of a digital contract that you can sign online. Review the contract carefully as it will set out your loan terms, repayments amounts and fees for late payments or defaults. If you have any questions about the contract, get in contact with your lender.

Step 5: How long it takes to receive your funds

This differs between lenders and will also usually depend on who you bank with. If the lender uses the same bank as you do you can receive your funds within minutes of being sent. Some lenders are able to do this if you bank with any of the Big Four.

However, with most, you will need to apply and be approved by a certain time (usually around 2pm) for the funds to be received on the same day. If you need your loan today, the earlier you apply the better chance you have.

Want to compare payday lenders?

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Name	Product	Maximum Loan Amount	Term of Loan	Turnaround time	Costs	Fortnightly Repayment (for $1500 Loan)
Nimble Short Term Loan Exclusive		$2,000	62 days to 9 months	1 hour - conditions apply	10% of loan amount + 2% of loan amount each month	$348	Finder Exclusive: 50% discount on the establishment fee (now 10% of the loan amount) and monthly fee (now 2% of the loan amount) A loan up to $2,000 with terms up to 62 days to 9 months. Centrelink cannot be your primary source of income.	Go to site More Info	Compare	loading Fetching your data...
Sunshine Short Term Loans		$2,000	9-12 weeks	30 minutes - conditions apply	20% of loan amount + 4% of loan amount each month	$396	A small loan up to $2,000 that you repay over 9-12 weeks. Loans approved and funded in as little as 30 minutes. Centrelink must not be your primary income	Go to site More Info	Compare	loading Fetching your data...
Wallet Wizard Smart Loan (Up to 2K)		$2,000	Up to 2 years	3 hours - conditions apply	47.8%	$316.70	Apply for up to $2,000 and be able to access your approved loan as a convenient line of credit.	Go to site More Info	Compare	loading Fetching your data...
Safe Financial Small Loan		$5,000	22 - 52 weeks	Same day - conditions apply	Up to 2K - 20% establishment fee + 4% monthly. Above 2K - $400 + from 8.7% to 48% APR	$396	Borrow from $1,000 to $5,000 with same-day funding and no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
Credit24 Short Term Loan		$2,000	6-12 months	Same day - conditions apply	20% of loan amount establishment fee + 4% of loan amount monthly.	$396	Credit24 offers this loan up to $2,000 and gives you 12 months to repay.	Go to site More Info	Compare	loading Fetching your data...
Fair Go Finance Small Loan		$2,000	3-12 months	1 business day	Establishment fee from 10% of loan amount + monthly fee from 2%	$354	A small loan between $500 and $2,000 that can be funded in 24 hours.	Go to site More Info	Compare	loading Fetching your data...

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• 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.

How much does a payday loan cost?

This depends on how much you apply for:

• Loans up to $2,000. These are referred to as Small Amount Credit Contracts (SACCs) and have a fee cap. You cannot be charged more than a 20% establishment fee and a 4% monthly fee.
• Loans $2,001 - $5,000. Referred to as Medium Amount Credit Contracts (MACCs), these are also restricted by an ASIC fee cap. You cannot be charged more than a $400 establishment fee plus an interest rate of 48% p.a. which includes all other fees and charges.
• Loans over $5,000. Lenders offering loans of this amount, excluding Authorised Deposit-taking Institutions (ADIs) are restricted to charging a rate of 48% p.a. which needs to include all fees and charges.

What if I need another payday loan?

Most payday lenders will allow you to borrow from them more than once if you prove yourself to be a responsible borrower. Some lenders, such as Nimble, make it easy for people to repeatedly take out loans with them by providing them with "members benefits". These benefits include a member's area that makes it easy to apply and a Nimble debit card through which you can receive instantaneous loans.

Have more questions?

Matt Corke

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Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.