Find out what you will pay with payday loans, and if the cost is worth the convenience.
Payday loans can offer you a way to get quick access to cash. Whether you need to get your car repaired or pay off a forgotten bill, these loans are designed to cover you when you’re caught short before payday. Before you decide to take out a payday loan it’s important to understand how they work, what fees are involved and what interest rates are charged.
Sunshine Short Term Offer
This is a short term loan offer with a fast and easy online application for bad credit borrowers who are employed. You can apply today to get approved for up to $2,000.
- Loan Amount: $2,000
- Loan Term: 9 weeks
- Turnaround Time: 30 Minutes - conditions apply
- Total Cost of Borrowing $100: 20% of borrowed amount + 4% of borrowed amount each month
- Bad credit borrowers OK
- Quick and easy Approval
- No Credit Checks - Must be employed
Comparison of Payday Loans
Warning about Borrowing
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 does a payday loan work?
Payday loans work by offering you a small amount of money, usually between $100 and $2,000, that is given to you as a loan. These loans are referred to as "payday" loans because the amount and terms are usually set according to your income and pay frequency, and are designed to be paid back in line with when you next get paid.
What are payday loan interest rates?
With payday loans, you are charged a set amount of fees that work in much the same way as interest. If you take out a payday loan you can be charged a 20% establishment fee and a 4% monthly fee. Payday lenders operate under strict lending guidelines set by the government in order to avoid irresponsible lending.
For loans up to $2,000 with terms of between 16 days and one year, lenders cannot charge more than the following as fees:
- Establishment fee. 20% of the principal amount you borrow.
- Monthly fee. 4% of the principal amount you borrow.
- Government fees or charges. These may differ depending on the lender.
If you take out a larger loan, you will be charged an interest rate, but lenders are still restricted as to how much they can charge you.
- Establishment fee. For loans between $2,001 and $5,000 with terms between 16 days and two years lenders can charge you a $400 establishment fee.
- Interest rate. For loans between $2,001 and $5,000 with terms between 16 days and two years lenders can charge a maximum annual interest rate of 48%, which includes all fees and charges excluding the establishment fee. For loans over $5,000 with terms longer than two years, lenders cannot charge more than an annual interest rate of 48% that encompasses all fees and charges.
It's important to keep in mind the above caps don't apply to authorised deposit-taking institutions such as banks, credit unions or building societies.
What is my payday loan interest rate?
Your "interest rate" depends on how much you are borrowing and for how long, but you can get an indication of the rate and costs using the payday loan calculator below. Use the slider to select how much you want to borrow and for how long, and you will get an indication of how much you will be charged.
This calculator is designed to provide you with an estimate based on the numbers you enter. Your personal details are not taken into account and all calculations are based off the calculation model. This calculator is not intended to be the sole source of your information when making a decision regarding your loan, and this calculator also does not guarantee your eligibility. The calculator works off the following assumptions: fees do not change for the life, your lender will charge a 20% establishment fee and a monthly fee that is 4% of your principal loan amount. You may want to seek advice from a financial professional before signing up to a loan.
How do these interest rates differ to rates of other financial products?
While these restrictions help to keep payday loans manageable, you need to compare them to other credit options that are available.
- Credit cards. Credit card interest rates vary depending on the type of card you hold. Some rates can be as low as 9% p.a., while others can be as high as 22% p.a. Credit card rates are variable while payday rates are fixed. A good comparison to make with payday loan interest rates are credit card cash advances rates, which are typically around 22% and also give you convenient access to cash.
- Personal loans. The interest rates charged on more traditional personal loans vary, but usually carry rates of between 8% p.a. to 15%. The rate you are offered depends on whether the loan is secured or unsecured. You can compare and read more about personal loans on this page.
What other fees and charges come with payday loans?
Lenders are able to charge the establishment and monthly/annual fees outlines above if you keep your loan in good standing. If you make payments late or default on your loans, lenders may also charge the following:
- Default fees or charges. These are charged by the lender if you default on the loan. This amount is set by the lender and may include late fees that are charged until you pay the loan back.
- Enforcement expenses. These are charged if you fail to pay back to the loan and the lender is forced to take you to court.
How you can compare payday loans
While lenders are restricted in terms of the fees they can charge, it’s still important to compare your options based on other features offered by then. Here are some things to look out for when comparing your payday loan options:
- What is the loan turnaround time?
Most payday lenders offer a quick turnaround time, although some may be quicker for others. Be sure to check when they will be able to transfer your loan amount to you and whether this will meet your needs as a borrower.
- Is the lender easy to contact?
As most payday lenders operate online, you want to be sure they are easily contactable via phone, email or live chat. If you are having problems with repayments or need to ask questions, you will want to be able to get in contact with them.
- Does the site have clear information?
You should also check that you are able to find all the information you need on their website. See if you can find a page for frequently asked questions, information about their fees, and terms and conditions.
- What are the loan terms and amount?
You should also check that you will be offered the loan amount and terms that you need. Some lenders only offer a small loan to new borrowers, while some may only offer loan terms that will make your repayments too high to afford.
- Does the loan have any additional features?
Some payday lenders offer other benefits and features that may be of interest to you. For example, Nimble offers a prepaid Visa Debit card that allows you to receive your loans instantly should you need to borrow again.
Things you should consider with payday loans
As with any type of loan, you need to consider your own personal financial situation before you decide to take one out. You should think about the amount you’re looking to borrow, the loan terms that you may be offered, and whether the repayments will be affordable to you. You should also consider whether a payday loan is the best type of finance for you, or whether you might want to look at credit cards, a line of credit or a secured or unsecured personal loan.
Want to apply? Here's how
To apply for a payday loan you can compare your options using the comparison table on this page. Once you find a lender you can click ‘Go to Site’ and be directed through to the lender’s online application form. To apply you will need to be over the age of 18 and be receiving some sort of income directly into your bank account.