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For people with active payday loan debts, finding themselves in a position where they can repay their loan early can help them to save money over the life of the loan. Repaying early can save customers money in fees and make their budgets easier to manage. However, not all lenders have the same rules in place when it comes to repaying early, and some may enforce penalty charges for doing so.
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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.
Before making early repayments or repaying the entire loan in full early, payday loan holders should consider the following:
How much someone can save will depend on how early they repay the loan, and whether there are any charges for doing so. It also depends on the type of payday loan the customer currently holds and whether it is a small or a medium loan. If a loan was for an amount less than $2,000, customers are usually charged a 20% establishment fee and 4% in monthly fees.
Example:
Sarah takes out a loan of $1,000 for a period of 3 months. Her establishment fee is $200, her monthly fees are $120 and her fortnightly repayments are $220. If she exits her loan 1 month early, she will save $120 over the life of the loan.*
However for medium payday loans, or loans of over $2,000, loan customers are charged an annual interest rate (not exceeding 48% p.a.). These repayments will generally be weekly, fortnightly or monthly and structured around when the person receiving the loan gets paid. By paying their loan early, someone will be charged less interest over the course of their loan.
Example:
Joe takes out a loan of $3,000 over a period of 2 years. Assuming Joe pays an interest rate of 40% and monthly fees of $10, his repayments are currently $194 p/m and his total repayments at the end of a 2 year period would total $4,646. If Joe repays his loan in just 1 year, his total repayments will only be $3,809, a saving of $837.*
*Please note that all examples are fictional and do not take into account any penalty fees or charges that may be incurred by early repayments.
The list below highlights which lenders allow early repayments and how to organise an early repayment.
Lender | Are early repayments allowed? | Loan rates and fees |
---|---|---|
Cash Converters | Yes and you may receive a discount | Review |
Cash Train | No. You can request changes to your repayment dates if you need to defer a repayment. | Review |
Credit24 | Yes. Email info@credit24.com.au with the date you want to pay out your loan. | Review |
Fair Go Finance | Yes | Review |
Ferratum | No | Review |
MoneyMe | Yes | Review |
MoneySpot | Yes | Review |
Nimble | Yes. Call 133 156 or email customercare@nimble.com.au to discuss your payment options and receive a payout figure | Review |
Speckle | Yes. You can make extra repayments and repay the loan early using the BPAY reference number in the online loan portal. | Review |
Swoosh Finance | No | Review |
Sunshine Loans | Yes. Contact Sunshine Loans to arrange payment. | Review |
Wallet Wizard | Yes. You can make additional repayments outside of your scheduled direct debit to pay off your loan faster. Do this within the Member's Area. | Review |
There are a number of factors to consider around payday loan repayments. Here is what to look for:
Repayments are an important part of any payday loan as they can either help keep the loan costs manageable by being flexible or cause the loan to become unmanageable by being too rigid. Among other things, payday loan customers should make sure that they check if they can repay their payday loan early before they apply.
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