Payday Loans Information Library

PAYDAY LOANS

What is a Payday Loan?

A payday loan is a short-term loan that is designed to cover you until your next pay day. Most payday loans have a loan term of just two weeks to a month (30 days), meaning they are ideal for emergency situations (such as an unexpected doctor's bill).

Payday loans are personal loans which means you do not have to secure them to a personal asset (such as a home or car).

Who Can Apply for a Payday Loan?

Applying for a payday loan is really simple and because payday lenders accept people with all financial backgrounds, it is not difficult to get your loan approval!

In general you will need the following:

• Australian citizenship
• Permanent address in Australia
• A working bank account
• Regular income
• Minimum monthly income (set by the lender)
• Minimum age 18 years (though this depends on the lender)

As mentioned above, one of the key benefits of payday loans is that they are offered to people from all financial backgrounds. So, even if you have:

• A bad credit score
• Defaults, debts
• A low income
• Been turned down for loans/credit in the past

...Then you could still be accepted by a payday lender. Just make sure you have a look at their main requirements – some will even take on self employed or unemployed applicants, while others will require that you have regular employment / income.

How Can I Apply?

This is the easiest part of the process. Once you have found the loan you want on Bad Credit Good Solutions, the application process can begin!

Most payday loans work like this:

• Online application form
• Lender decides in minutes
• Once approved, loan is transferred to your bank account
• Use loan for whatever you need
• Repayment after 2 weeks / 1 month plus interest

Most payday loans can arrive in your bank account by the next day.

How Much is the APR?

This depends on the lender. Payday loans can have quite high APR, because the lender needs to reflect the higher risk that he is taking on. By taking on people who have been turned down by regular banks or have an 'undesirable' credit score, the risks are higher that the borrower may not pay their loan back or fall into difficulties. A higher interest rate means that this risk is counteracted.

Typically you could be paying back around $125 for every $100 you borrow. Before you apply, make sure you have checked the terms of the loan and the amount of interest that you will be charged.

What are the Benefits of Payday Loans?

Payday loans are extremely popular and it is easy to see why:

• All borrowers welcome
• Often NO credit checks
• Access to cash fast
• Same day / next day money in your account
• Use the loan for any purpose
• Borrow as little as $100

Most payday lenders will accept all borrowers, regardless of financial history.

What are the Risks of Payday Loans?

Payday loan is ideal for people who need cash really fast. They are also aimed at people who have a low credit score or get turned down by regular banks. However, there are always risks involved in borrowing money, especially when the interest rate is quite high.

If you have had problems with money in the past or have existing debts to your name then it might not be the most advisable action to take another loan. You could find yourself in trouble or land in difficulty and be unable to pay the loan back – with the interest rate you could end up owing a lot of money.

Risks are present with any loan product / credit card so make sure you have thought over your options and if necessary seek independent financial advice.