Are $500 payday loans dangerous?
Payday loans can be dangerous because they come with high fees, which could cause problems if you’re struggling with debt. On a $500 payday loan, the lender may charge an establishment fee of up to $100 and a monthly fee of up to $20.
That’s why you should look at a $500 payday loan as an option of last resort – something to consider only if you’ve explored all other options. If you do take out a $500 payday loan, you should have a plan to repay the loan and get out of debt.
Yes, it may be possible to get a $1,500 payday loan with bad credit. Some payday lenders give loans to people with bad credit histories if they believe the borrower has the capacity to repay the loan.
Under Australia’s responsible lending rules, lenders aren’t allowed to approve $1,500 payday loans if they don’t believe the borrower can make the repayments.
People use no credit check loans when they have bad credit and need money in a hurry.
Most lenders steer clear of no credit check loans, because they believe it’s too risky to lend to people with a bad credit score. However, some payday lenders are prepared to issue no credit check loans.
A word of warning – no credit check loans generally come with high fees. Payday lenders can’t charge interest, but they are allowed to charge an establishment fee of up to 20 per cent of the loan amount and a monthly fee of up to 4 per cent of the loan amount.
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Payday loans are loans of up to $2,000. Loan terms are generally between 16 days and 12 months, although they can sometimes be longer. Payday loans usually have these three characteristics:
- Borrowers need money in a hurry
- Applications are assessed rapidly
- Loans are expensive (high fees)
With $1,200 payday loans, you can be charged an application fee of up to 20 per cent (or $240) and a monthly account-keeping fee of up to 4 per cent ($48) – although you can’t be charged interest.
If the lender charges a monthly fee, the longer your loan term, the more you’ll have to pay. Here’s how the fees can add up:
- 1 month = $48
- 2 months = $96
- 3 months = $144
- 4 months = $192
- 5 months = $240
- 6 months = $288
- 7 months = $336
- 8 months = $384
- 9 months = $432
- 10 months = $480
- 11 months = $528
- 12 months = $576
Not many lenders offer no credit check loans – but if you find one that does, the application process is quite easy. Here’s how it works:
- Find an online lender that offers no credit check loans
- Decide how much you want to borrow, and for how long
- Provide information about your identity, income and employment
In the best-case scenario, it might take less than an hour for the lender to assess your application, approve it and then transfer the funds.