Payday loans can be helpful when you need cash fast but can be expensive when compared to other loans.
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Short term cash loans, also known as payday loans, are a type of personal finance generally borrowed on terms of between 16 days and 1 year. They are a high cost form of loan, and should therefore only generally be used in the case of financial emergencies.
Use this guide to compare payday loans, also known as short term cash loans, and learn about the rates and fees to decide if it's the right choice for you.
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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:
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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.
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This is a short-term loan offer with a fast and easy online application for good or bad credit borrowers. You can apply today to get approved for up to $2,000. Get your loan funded in 30 minutes - conditions apply.
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
Compare lenders and loans in the table above. Consider the loan amounts on offer, the length of the repayment term, how much will need to be repaid fortnightly and any fees that will apply. It's important to check the eligibility requirements and turnaround time to receive the loan as well. If you've compared your options and confirmed that you meet the eligibility criteria, you can begin your application by clicking "Go to site".
4 quick tips for making comparisons
Sort the table. To compare lenders you can click on the column headings to sort the table according to what you want and need.
Click through to the review page. You can read a detailed review of the loan before you apply by clicking on the name of the loan. There you'll find out the fees, features and restrictions that are included, plus other important details.
Find the necessary information. If you are looking for specific information on loans, we might already have a guide for your needs on Finder. You can look through the guides section in the left-hand navigation, or use the search function at the top of the page.
A fast payday loan might be helpful when you're in need of quick cash to pay for unexpected bills or expenses. But they can be expensive forms of credit and shouldn't be used to fix long-term financial issues. They should also not be used to cover day-to-day expenses (unless absolutely necessary) or buy a big-ticket item such as a car. People should avoid payday loans if it will put their budget under strain, as late fees for payday loans can build up quickly and result in debt.
Unaffordable repayments. Payday loans are an expensive way to borrow money. Check the size of each repayment and ensure you will be able to pay on time. If you can't afford the repayments then you will end up paying late fees that will only make your financial situation worse.
High rates and fees. Interest rates, late payment and default fees on payday loans are high. Make sure your lender is not charging you more than ASIC allows and check what you would be charged if you are late on a payment or if you can't pay back the loan altogether.
Be careful who you borrow from. All the companies listed on our tables are accredited by ASIC. If you are thinking about taking a loan from a company not on our tables, check that it has 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 some lenders might not consider credit rating, applying for lots of loans in a short period can have a negative impact on your credit score. Building up a good credit score is important as it will help you to get better deals on financial products in the future.
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 on 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 on the following assumptions: fees do not change for the life of the loan, 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.
Hi I'm Elizabeth, personal loans editor at finder.com.au. If you're thinking about applying for a short term loan one of your main concerns is going to be the cost. We're going to break down those costs so you can decide if these loans will work with your budget. Short term loans are one of the most strictly regulated loans available and because of this lenders are restricted as to how much they can charge. The credit regulator ASIC has made it so that lenders offering loans of less than $2,000 with terms of between 16 days and 1 year can only charge fees and not interest rates. That's right, these loans actually come with no interest. The reason people think that interest is charged on short term loans is that the fees are expressed as percentages. So let's look at these fees. The first fee that you need to consider is the establishment fee. Lenders cannot charge you more than 20% of what you borrow for this fee. The second main fee you need to consider is the monthly fee. Lenders cannot charge you more than 4% for this fee. Remember that these restrictions only apply to loans of less than $2,000 with terms of between 16 days and 1 year. If you're borrowing more, different restrictions will apply. Now you know how much you can be charged, let's look at an example. Let's say I take out a loan of $500 with terms of 62 days, which is a pretty standard loan term offered by short-term lenders. In total I will repay $660. This includes my original loan amount of $500, my establishment fee which equals $100 and 3 monthly fees of $20 each. So now you know how much short-term lenders are able to charge and how to work out how much you will pay when you take out one of these loans. Remember though that not every lender will charge you the maximum allowable fees, so compare your options before you apply. To find out more about short term loans and how to compare them head on over to finder.com.au.
A short term loan or "payday loan" is a form of credit that must be repaid in less than 12 months. The term of the loan will vary, but can sometimes be as short as 62 days or as long as 12 months. Customers are usually required to make repayments in line with when they're paid (such as fortnightly), hence the term "payday loan".
People can apply for loan amounts up to $2,000, which come with fixed fees that are regulated by the government body ASIC. Fees consist of a 20% loan establishment fee and a monthly loan fee of 4%, which are calculated based on your principal. Most payday loan lenders will charge the maximum possible capped fees. However, some lenders may have more affordable options, so it's important to compare payday loans prior to submitting an application.
What is loan principal? The amount you borrow from the lender is referred to as the "principal amount". Before deciding on a principal amount, you should ensure you have the available funds to pay back the loan on the due date including any fees and charges. Use the calculator above to get an idea of the repayments (principal + fees). A short term loan is unsecured, so if you can't pay it back, the lender can report the debt to a credit reporting body such as Equifax and use the services of a debt collector.
What if I can't repay the loan?
If you don't make repayments on time you will be charged a fee. Any defaults on the loan will also be listed as a negative mark on your credit report and can remain there for as long as seven years. If you already have a loan and you don't think you can make a repayment, contact the lender to discuss what your options are.
When comparing loans you should only apply for as much as you can repay and ensure your budget aligns with the repayments. If you have any doubts about your ability to meet repayments, consider other options and don't apply for the loan.
You can apply for a payday loan online and will need to meet the eligibility requirements to be approved. The applications can usually be completed online. The exact eligibility criteria will depend on the loan and lender, the application process usually involves the following steps:
Step 1: Compare lenders
Finding the right lender is the first important start of the application process. Prospective payday loan applicants should review the loan amount, fees, turnaround time and loan term to ensure that they are applying for a loan that meets their needs.
Step 2: Review the eligibility criteria and required documents
Be 18 years of age or older
Earn a regular income, usually around $350 a week
Be employed, receive an income or government benefits
Receive less than half of your income from benefits
Get paid frequently into your bank account (not in cash) either daily, weekly or monthly
Not be self-employed (some lenders may make an exception)
If you have bad credit, you need to prove that your current financial situation is stable and reliable
It's important to note that meeting the eligibility requirements does not guarantee approval of your loan.
Driver's licence (or proof of ID card)
Three recent payslips
Your Internet banking details
Utility bill such as council rates, electricity, gas, Foxtel/Austar, mobile phone or Internet
Step 3: Approval
Lenders can usually let an applicant know if they've been approved or not in a matter of minutes. This is because most lenders have an electronic system, often known as a loan engine, to assess their applications, rather than a human being. If more information is required in order to approve someone, the lender will get in contact with the applicant to get this information, and the person's application may be delayed.
Step 4: The contract
If someone is approved, they need to agree to the loan contract before they are sent the funds. Many lenders do this by sending their customers an SMS or a copy of a digital contract that they can sign online. Applicants should review the contract carefully, as it will set out their loan terms, repayments amounts and fees for late payments or defaults. If someone has any questions about the contract, they should get in contact with their lender before signing.
Step 5: How long it takes to receive funds
This differs between lenders and will also usually depend on who the applicant banks with. If the lender uses the same bank as the applicant, they can receive their funds within minutes of being sent. Some lenders are able to do this if a customer banks with any of the Big Four.
However, with most, customers 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 an applicant needs their loan today, the earlier they apply, the better chance they have.
How much will a payday loan cost?
Lenders who try to charge you more than these fees are breaking the law.
Establishment fees. This fee is to cover the set-up of the loan and is capped at 20% of the principal.
Monthly account fees. Monthly fees are capped at 4% of the principal.
Interest fees. This is a percentage amount you're charged for the loan and comprises the monthly account fee and establishment fee.
Establishment fees. This fee is to cover the set-up of the loan. This is capped at $400.
Interest. Interest is capped at 48% p.a. of the principal.
Along with establishment and monthly fees, you may be charged fees in the following situations:
Late payment. You will be charged a late payment fee if you fail to make a repayment on time and don't inform the lender beforehand.
Arrears. A fee will apply if the account goes into arrears.
Collection. Any loans which are referred to collections or are defaulted on may incur additional fees.
Collection letter send-out. A lender may charge a fee if they have to send a collection letter because you have made a late repayment.
Statement fee. Some lenders may charge a fee for issuing a paper statement.
Since 2012, payday loans have had tighter restrictions and regulations under government reforms that capped fees and charges – no interest is charged. If you're borrowing under $2,000, fees are capped at 20% of the loan amount as an establishment fee and a 4% monthly account-keeping fee. If you borrow $100 for a month and pay back the loan on the required date, the amount debited will be $124. The less time you have the payday loan, the higher the annualised rate will be. When comparing payday loans, it is important to keep the repayment schedule and many other factors in mind. To help you compare payday loans, you could read our frequently asked questions guide. By law, payday companies are not allowed to include any reference to interest rates on the contract of credit. They can make references to the effective comparison rates and APR, but it's important to remember that payday loan interest rates are based on a shorter loan term than the standard APR calculation of 365 days.
Am I eligible for a payday loan if...
Some lenders consider a pension as an eligible form of income. However, whether you're approved will depend on your specific situation and finances. See Finder's guide to loans for pensioners to compare payday loans for pensioners and alternative options.
Some payday lenders and institutions do consider Centrelink payments as income, so you may be eligible for a loan. Most lenders won't approve someone if government benefits make up more than 50% of their total income. See Finder's guide to getting a loan on Centrelink payments for more information.
Short-term lenders offer flexible eligibility criteria and can accept people with bad credit as long as they meet the other eligibility requirements. Some lenders don't conduct credit checks for loans up to $1,000, but applicants still need to meet eligibility criteria and prove that they can make repayments.
Frequently asked questions about payday loans
What can I use payday loans for?
Payday loans can be used for a wide range of purposes, but are generally for unexpected expenses. Common uses for payday loans include forgotten bills, car repairs or medical expenses.
How much can I borrow?
Lenders will have a maximum loan amount and some will have a lower maximum amount for first-time borrowers. The amount you're able to borrow depends on how much you get paid and your financial situation – in short, your ability to repay your loan. You can use the payday loan calculator above to help see what your repayments will be on different loan amounts.
I've never taken out a payday loan before. What do I do?
If this is your first time taking out a payday loan, it's important to understand the application process before you apply. The entire application will take place online, so make sure you have all your personal documents and financial details handy. You'll need to compare things like minimum income, employment terms, Centrelink eligibility and whether the lender does a credit check. You can also get an idea of the repayments using the tables above. Each lender is different so ensure you read each step before continuing. Make a note of the terms and the repayment amounts (and dates) and ensure you will have enough to repay your loan. If you need any assistance, once you've clicked "Go to site" the lender will be able to answer questions you may have, or you can start an application.
Are payday loans a bad idea?
Payday loans are an expensive form of credit and you should compare your options as well as research any rates, fees and conditions before applying. While payday loans are heavily regulated by ASIC, it's important to remember that they are costly and you shouldn't apply if there are alternatives available to you. Before you apply, see if you may be eligible and if the other credit types suit your needs. It's also a good idea to calculate costs to see if any of the alternatives are cheaper than a payday loan.
The majority of lenders will direct debit your account on the day you get paid but will not deduct the repayment amount directly from your pay.
How quickly will I get my cash advance money transferred?
Most payday lenders will assess an application and give a response within 60 seconds. However, it may take longer if the lender requires further supporting evidence including proof of income or employment via bank statements or payslips. If approved, customers can usually expect the funds in the nominated account within one to two business days. Under government law, all small amount credit providers must check 90 days' worth of your bank statements. This is to check that you can service the loan and the repayments. Instead of faxing or emailing these statements to the bank, some lenders use online verification through Credit Sense. Credit Sense uses 128-bit security encryption to safely provide your bank statements. Bank details and login information aren't stored.
I already have a payday loan. Can I get another one?
Payday loans are regulated by government law and designed to be a "stop-gap" solution to financial problems. There are various restrictions around borrowing more than one loan at once. Find out if you might be eligible here.
I am struggling with repayments. Can I renew my payday loan?
In line with Australian government regulations, you can not renew or roll over your loan. If you want to take out another loan, you'll first have to pay off your current loan and then re-apply (after assessing your current financial situation).
Is it a bad idea to keep taking out payday loans?
If you make all of your repayments on time then a lender may approve you for another loan. Some lenders have benefits for repeat borrowers such as increased borrowing amounts and quicker funding. However, these loans are not a long-term solution and if you need to borrow money frequently, you may want to reassess your expenses or consider a more stable line of credit.
How do I know if my details and account are secure?
Australian payday loan companies use a secure online system, such as Verisign, McAfee or Norton to secure data. Payday loan applications are generally carried out on a secure online application form to help protect the applicant's privacy. These systems use a 128-bit secure server and SSL encryption to ensure personal information cannot be stolen. To verify the applicant's income, payday lenders will need a snapshot of your account for the past 90 days. These services are secure and they only provide a "read-only" view of your account.
I just changed bank accounts, can I still apply for a loan?
As per the government regulations, payday lenders require at least 90 days of bank statements. If you've recently changed bank accounts, you can contact your old bank to request the bank statements that you require.
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