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.
Short term loans in Australia normally mean the same thing as payday loans. They refer to loans of under $2,000 designed to be repaid in under a year.
The Australian government regulates how much you can be charged for one of these loans, but even then they are very expensive. Before taking one out, be sure to look at the alternatives to payday loans.
How much does a short term loan cost in Australia?
Short term loans are an expensive form of credit and cost more than traditional personal loans. Short term loans are regulated by the Australian government, so while still expensive they cannot charge you more than: Establishment fees. 20% of the borrowed amount Monthly fees. 4% of the loan amount Late or default fees. Only if you miss your payments by their due date. Each fee varies but in total cannot be more than double what you borrowed.
If you take out a $1,500 short term loan for 12 months, your costs will be:
Total loan amount of $1,500
Total establishment fees of $300
Total monthly fees of $720
The total cost of this example loan will be $2,520. Your fees alone come up to $1,020.
What should I look at when I compare short term loans?
Comparing short term loans is important as they are one of the most expensive forms of debt on the market. You should look at:
Rates and fees. You should make note of all fees and charges. This includes additional fees that may be applicable.
Loan term. Loan terms are typically short, ranging from 16 days to 12 months. Longer loan terms mean lower monthly repayments. But you also end up paying monthly fees for longer. All these costs add up and make the loan more expensive. You should also only apply for a loan if you can repay within the agreed loan term.
Loan amount. Loan amounts for short term loans are usually up to $2,000. How much you're approved for will depend on your income, credit history, the loan amount you've asked for and your ability to repay the loan.
Repayments. Your repayments will be structured around the income you receive. This can be weekly, fortnightly or monthly. Before applying, you should calculate the cost of your repayments. It can help you determine whether it fits into your budget. Some lenders will allow you to repay the loan early. This can help you save on fees and charges.
Turnaround. If you need the funds fast, you should consider how long lenders take to deposit the money in your account. Some can issue funds within 30 minutes or a few hours, while others can take longer.
Am I eligible for a short term loan?
The eligibility criteria of short term lenders is more flexible compared to personal loan lenders. The criteria will differ between lenders, but you'll generally have to meet the following to qualify for a loan:
You must be over the age of 18
You must be a citizen or permanent resident of Australia
You must be able to provide identification
You must be able to provide 90 days of banking history
You must earn regular income, usually at least $350 a week. If you receive income from Centrelink, it cannot be more than 50% of your total income. If you have bad credit, you need to prove your financial situation is stable and that you're able to repay the loan.
What are the pros and cons of short term loans?
Pros of short term loans
They will lend to those with bad creditFor people with low credit scores, these loans can sometimes be the only form of credit available.
Fast turnaround.These loans generally have an automated review process, so approval and funding tends to be quite fast - especially if you apply during business hours.
Cons of short term loans
High fees and charges. Short term loans of $2,000 or less don't include interest. Rather, they have a hefty fee to cover the cost of borrowing. There are also fees for late payments. These fees are regulated by ASIC and it's illegal for lenders to charge more. You should ensure you can repay the loan with ease before applying.
Short terms. These loans come with short terms of only up to 12 months.
Inflexible loan terms. Most lenders will ask you to repay the loan on the next payday. They could deduct the funds directly from your account.
Disreputable lenders. Check the lender's website and make sure it's a reputable company. You should ensure it is registered with ASIC. The lender should also be easy to contact.
More debt. Given how expensive these loans are, they could potentially lead to more debt if you can't meet your repayments. Late or non-repayments could lead to more fees, which has the potential to spiral out of control. Failure to repay could also lead to legal issues for you.
Reasons you might need a short term loan
Ideally, you should only take a short term loan for:
Unexpected or forgotten bills or payments. If you have no other alternative to cover a forgotten bill, a short term loan may be an option. If you have an urgent utility bill to pay, you should contact your service provider first. It may be able to work out a plan to pay bills or fines in instalments.
Financial emergencies. This can include emergency medical expenses or emergency car repairs.
Unavoidable home repairs or purchases.
Unexpected expenses before payday. If you have no other alternative and you're short on funds due to an unexpected expense. It's important to remember that this is not a long-term strategy.
Income bridge. If you're waiting on guaranteed funds to come through on a large payment, a short term loan may be an option.
Given how costly these loans are, you should avoid taking them to pay for:
Everyday necessities. If this is the case, you should consider a longer-term solution for your credit needs.
Repayments for existing debts. Taking a loan to pay for another loan may make your debt problem worse. You may end up paying more in fees and charges and get into further debt. Short term loans are not a long-term financial solution.
Holidays
Big-ticket items like cars
Other non-essential expenses and purchases that can wait
How can I apply for a short term loan?
Compare lenders. Look at the fees, terms and eligibility criteria and find a loan that suits you.
Once you've settled on a lender from the table above, click "Go to site" to visit the lender's website.
Submit your application. This normally takes around 10 minutes, but can be faster if you have documents like your bank statements ready.
FAQs about short term loans
Short term loans can have loan terms from 16 days to 1 year. Most providers have calculators that will allow you to see how much the loan will cost based on their fees and your chosen repayment period.
These loans are unsecured so you don't have to. Some lenders may accept assets as security for loans. Keep in mind that if you default on the loan, you could lose your asset.
If you have a credit card with available credit or if you're eligible for an overdraft, these are options you should consider. You can also work out the cost difference if you know how much you need to borrow.
There are many car loan leases in the market that require a deposit. Sometimes borrowers use a small amount to secure a deposit for the car, which they then pay off using the finance procured. It would be best to consult a financial planner before considering this option.
When you apply for a loan, you're required to show the lender your bank statements of up to 90 days. In the past, this was done by printing and faxing your bank statements. Lenders now use encrypted software to access a read-only copy of your bank statements. To be able to do so, and process your application fast, they will require your Internet banking details. This process is secure and is done over 128-bit encryption.
Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. 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.
These lenders won't complete a credit check when people apply for a loan, but there are other eligibility requirements that applicants must meet. Learn more here.
Need a loan but are worried you won't be approved? Before jumping the traditional bank ship and searching for a loan shark, find out how these "lenders" operate in Australia and why you should avoid them.
Deciding which short-term loan is right for you can be tricky. We compare Nimble and Cash Converters to see which fees and features will suit you best.
Also, if you need help to manage your budget or get out of debt, the National Debt Helpline provides a free and confidential service to help you get back on track.
Thanks for your comment and I hope you are doing well. This page shows all lenders you can review for a short term loan.
Above, you will find a table that lists the brand covering short term loans. As there’s a lot of lenders to choose from, what’s good about this table is you can compare up to 4 providers side by side by ticking the box below the brand name. Click COMPARE and it will show a pop-up window of their features and benefits side by side. When you already have a brand in mind, I suggest reading more information about them via Finder review pages by clicking the MORE INFO button. The page contains benefits and features that you would want to know, eligibility criteria and especially how to apply to their company. When you are ready, find a green GO TO SITE button to be brought to the official website of the provider.
Know that this is where you get a quote or start your application. As a friendly reminder, carefully review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Hope this helps and feel free to reach out to us again for further assistance.
There are loan options available while you are unemployed and receiving Cash Aid. You may refer to our list of Centrelink loans to compare lenders that might consider you for a loan. You can click the name of the lender to read our product review. When you are ready, press the ‘Go to site’ button to apply.
Be sure to review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the lender should you need any clarifications about the policy.
You may want to check fast cash loans featured on our website for your guide and options. Please do check the eligibility criteria to apply before clicking the ‘go to site’ button.
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Do you really need a loan today?*
I want a loan ,got no internet on my bank acccansupply bank statement and centerlink statment
Hi Rosalinde,
This guide about PayDay Loans may be helpful.
Also, if you need help to manage your budget or get out of debt, the National Debt Helpline provides a free and confidential service to help you get back on track.
Where can I go to find a short term loan?
Hi Patricia,
Thanks for your comment and I hope you are doing well. This page shows all lenders you can review for a short term loan.
Above, you will find a table that lists the brand covering short term loans. As there’s a lot of lenders to choose from, what’s good about this table is you can compare up to 4 providers side by side by ticking the box below the brand name. Click COMPARE and it will show a pop-up window of their features and benefits side by side. When you already have a brand in mind, I suggest reading more information about them via Finder review pages by clicking the MORE INFO button. The page contains benefits and features that you would want to know, eligibility criteria and especially how to apply to their company. When you are ready, find a green GO TO SITE button to be brought to the official website of the provider.
Know that this is where you get a quote or start your application. As a friendly reminder, carefully review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the bank should you need any clarifications about the policy.
Hope this helps and feel free to reach out to us again for further assistance.
Best,
Nikki
I am not working at the moment I do not have a bank account I get Cash Aid from the government once a month would I qualify
Hi Marlene
Thanks for reaching out.
There are loan options available while you are unemployed and receiving Cash Aid. You may refer to our list of Centrelink loans to compare lenders that might consider you for a loan. You can click the name of the lender to read our product review. When you are ready, press the ‘Go to site’ button to apply.
Be sure to review the eligibility criteria of the loan before applying to increase your chances of approval. Read up on the terms and conditions and product disclosure statement and contact the lender should you need any clarifications about the policy.
Best,
Nikki
Hi
I just need a quick $1000 which I can repay by mid March. What do you recommend?
Hi Mark,
Thanks for your question.
You may want to check fast cash loans featured on our website for your guide and options. Please do check the eligibility criteria to apply before clicking the ‘go to site’ button.
Cheers,
Anndy