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)
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
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 are instant approval loans?
Instant approval loans are payday loans that have a very short assessment process. Please note that the name is a bit misleading, because no assessment can ever be instantaneous and approval can never be guaranteed.
Taking out an instant approval loan involves a four-step process:
- You fill in the payday loan application
- Your application is assessed
- Your application is approved
- The lender transfers the funds to your bank account
With some payday lenders, the process is so quick that it may be completed within an hour. However, even if the payment is made that quickly, it might then take two business days for the money to arrive in your bank account.
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 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.