Why do people take out $500 payday loans?
People often use $500 payday loans when their savings are exhausted and they get hit with an expense that feels urgent. Examples include:
- School fees
- Medical bills
- Vet bills
- Car repairs
- Mortgage repayments
- Funeral costs
- Family holidays
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.
Can I get a $1,500 payday loan with bad credit?
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.
Should I take out a payday loan?
As a general rule, you should take out a payday loan only if there are no other options. That’s because payday loans are usually very expensive.
Payday lenders can’t charge interest – they can only charge fees. But the fees can be steep, so your borrowing costs might be equivalent to paying an interest rate of more than 500 per cent.
What are payday loans?
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)
How do I get a $500 payday loan?
The most common way to get a $500 payday loan is over the internet, although some lenders also take in-store applications. The application process may take as little as five minutes and, in some cases, your loan may be assessed and approved within the hour.
When you apply for a $500 payday loan, you will probably have to provide:
- Name and address
- Proof of identification
- Employment details
How do $1,500 payday loans work?
A $1,500 payday loan is a loan that is likely to have a fast approval process and charge high fees. Depending on your circumstances, you might be able to receive the money within an hour.
However, if you want the lender to give you the money almost instantly, and without conducting an in-depth credit assessment, you’ll have to pay for the privilege. The lender can charge you a one-off establishment fee of up to 20 per cent (which would be $300 for a $1,500 payday loan) and a monthly account-keeping fee of up to 4 per cent (or $60). Payday lenders can only charge fees – not interest.
Why do people use no credit check loans?
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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