Should I take out a $1,000 payday loan?
As a general rule, you should think very carefully before you take out a $1,000 payday loan – and proceed only if you’ve explored all other options. That’s because payday loans generally have very high fees.
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.
Where can I get a $1,000 payday loan?
Australia has several dozen lenders that offer $1,000 payday loans. These payday loan providers tend to be smaller, lesser-known non-bank lenders rather than well-known big banks. Generally, they’re online-only businesses, which means you’d have to apply for your $1,000 payday loan over the internet. However, there are some payday lenders that also allow in-store applications.
What's the interest on a $1,000 payday loan?
Payday lenders aren’t allowed to charge interest on $1,000 payday loans (or any other payday loans). However, they are allowed to charge high fees, which may include:
- An establishment fee of up to 20 per cent (or $200)
- Monthly fees of up to 4 per cent (or $40)
Depending on the length of your loan, here is the maximum amount you would have to repay with a $1,000 payday loan:
- 1 month = $1,240
- 2 months = $1,280
- 3 months = $1,320
- 4 months = $1,360
- 5 months = $1,400
- 6 months = $1,440
- 7 months = $1,480
- 8 months = $1,520
- 9 months = $1,560
- 10 months = $1,600
- 11 months = $1,640
- 12 months = $1,680
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
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.
How long do you have to repay a $1,200 payday loan?
Depending on the lender, you’ll generally be given between 16 days and 12 months to repay a $1,200 payday loan.
As a general rule, the longer your loan term, the more the loan will ultimately cost you, because most payday lenders charge monthly account-keeping fees.
How much does a payday loan cost?
Payday lenders can’t charge interest on payday loans. But you might be charged these fees:
- A one-off establishment fee of up to 20 per cent of the loan
- A monthly account-keeping fee of up to 4 per cent of the loan
- A government fee
- A penalty fee (if you default on the loan)
For example, imagine you took out a $1,500 payday loan with a 12-month loan term and fortnightly repayments. Here’s how much you might be charged:
- An establishment fee of $300
- An account-keeping fee of $60 per month (or $720 over 12 months)
As a result, your repayments would be:
- $96.92 per fortnight
- $2,520 in total (equivalent to an interest rate of 68 per cent per annum)