A short term loan is a small loan that is designed to be repaid in a short period to help cover unexpected expenses. In this guide, you can compare short term loan options, find out about how they work and how much they cost.
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. Find out more here: https://www.finder.com.au/coronavirus-financial-help
⚠️ 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.
Sunshine Short Term Loans
Go to site
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
- Bad credit borrowers OK
- Quick & easy Approval
- Bad credit applicants considered
- Fast approval service
- Borrow up to $2,000
Short term loans comparison
What's the eligibility criteria for a short term loan?
Eligibility criteria differ between lenders, but generally you will need to meet the following:
- Be over the age of 18
- Be earning a regular income, usually at least $350 per week
- If you receive Centrelink and it is more than 50% of your income, repayments cannot exceed 10% of your income. This rises to 20% if you receive less than half of your income from Centrelink.
- If you have bad credit you need to prove your financial situation is stable and that you can repay the loan
How much does a short term loan cost in Australia?
Short term loans are expensive forms of credit and cost more than traditional personal loans. In Australia, lenders are restricted as to how much they can charge as fees for short term loans. For loans under $2,000, they cannot charge more than a 20% establishment fee and a 4% monthly fee plus late fees and enforcement expenses. The fee structure differs for loans with higher amounts. Fees and rates are listed in Finder review pages and comparison tables.
What are the risks of short term loans?
- Various loan amounts. Apply for between $100 to and as much as $10,000 with a short term loan. Higher amounts will attract higher repayments.
- Capped rates and fees. The lender is restricted as to how much it can charge you in interest and fees. Make sure you aren't being charged more than the regulated fees laid out by ASIC.
- High cost. Short term loans come with higher rates and fees than other banks and credit unions. They also usually have shorter repayment periods, which means debt can pile up quick if you fall behind.
- Dodgy lenders. While there are many reputable lenders operating in the space, you can come across dodgy ones that approve you for a loan you cannot afford. Remember that there is no such thing as a guaranteed loan and anyone who promises otherwise is breaking the law.
- Long-term repercussions and legal issues. Once the loan agreement is signed, the customer is bound to its conditions until the loan and any associated rates and fees have been paid. Typically these loans are unsecured, which means that the lender can initiate legal proceedings against the customer if they can't repay.
Reasons you might need a short term loan
People choose to get short term loans for a variety of reasons, including;
- To pay for unexpected or forgotten bills or payments
If you have no other alternatives to cover a forgotten bill, a short term loan may be an option to consider.
- To cover expenses until payday
A small short term loan can be an option to consider if you have nothing else available to you and you are short on funds due to an unexpected expense. However, it's important to remember that this is not a long-term strategy.
- To bridge an income gap when you are waiting on payment
If you are waiting on funds to come through for a large payment, a short term loan may be an option if you are guaranteed to receive the payment and you have no other choices.
Alternative to short term loans
Short term loans should only be considered as a last resort. There are a number of alternatives available including community and government financial assistance programmes, Centrelink advances and more. If you need financial assistance you can also get in contact with a free financial counselling service to discuss options for dealing with your debt.
Frequently asked questions about short term loans
How long is a short term loan really for?
Short term loans can last anywhere from 16 days up until one year. Most short term loan providers have calculators available that allow you to see exactly how much your loan will cost you based on their fees and your chosen repayment period.
Do I need to put up any collateral?
Some short term lenders accept assets as security for loans. Keep in mind this is risky as you could lose your asset if you default on the loan.
Could I use my credit card instead or even an overdraft?
If you have a credit card with available credit or are eligible for an overdraft with your current bank, then these are definitely alternatives to consider. You can also work out the cost difference if you know how much you need to borrow.
Could I use a short term loan as a deposit for another form of financing?
There are many car loan leases in the market that require a deposit for your finance to be secured. Sometimes borrowers use a small amount to secure a deposit for the car financed from the bank and then refunded through the finance amount. It is wise to consult a financial planner before considering this option.
Why do I have to give my Internet banking details to get a short term loan?
When you apply for a loan, you are required to show the lender that you get paid regularly and can service the loan repayments. In the past, this was done by printing off your bank statements and faxing them in. Since technology has now progressed, there is software that allows you to login and provide these electronically to the lender. These systems are 100% secure and are done over 128-bit encryption.