What is a Payday Loan?
Have you ever found that you have run out of money long before your next pay check is due? The stress and worry that this can cause is horrible. Sometimes in life things happen that you can’t plan for. Unexpected bills and family emergencies can cause sudden financial problems.
If you’re struggling with money and you don’t know what you are going to do until your next payday then a payday loan could be the answer.
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Understanding Payday Loans
When you think of a loan, you typically imagine borrowing a large sum of money and paying it back on a monthly basis. You can choose from a number of term options and many people choose to pay the money back over the period of 3-5 years. A payday loan isn’t like that. Whatever you borrow, you must pay it back within a month.
It is called a payday loan for two reasons. Firstly you are borrowing money to get you by until your next payday. Secondly you pay the loan back when you get paid. Due to this fact you’ll find the amount that you can borrow is a lot less than a standard personal loan.
In Australia payday loans are also commonly referred to as a fast cash loan. There are many advantages to this type of loan and they are quickly becoming one of the most popular loans available on the market.
The features of a payday loan include:
- It is a short term loan
- You only need to earn a low monthly income
- You can get the cash within the same day
- There are usually no credit checks carried out
- You can be instantly approved
As you can see from the above list, payday loans are typically convenient and a lot easier to get than a standard loan. When you apply for a personal loan with a bank for example, it could take weeks to get the money that you need.
The reason you are applying for a payday loan is because you need the money quickly. Therefore lenders aim to put the money into your account within just a few hours.
Different lenders will require a varying minimum monthly income. The majority will usually ask that you earn at least $1,000 per month. This may be lower or higher so you may need to shop around to find a lender to suit your needs.
The reason why there is a minimum salary requirement is because the lender needs to make sure that you can realistically afford to pay back the loan amount. The amount that you are asking to borrow will also make a big difference to whether there is a minimum salary requirement.
When you apply for a payday loan online you will be instantly approved. You literally find out within a minute whether you can get the money that you need. No credit checks are usually carried out which is another reason why you receive the money so quickly.
Overall payday loans are convenient, easy to apply for and you could receive the money the same day. That is clearly the biggest reason they’re proving to be so popular.
The Advantages of a Payday Loan
Besides the fact that you get the money really quickly, payday loans are fantastic if you have a poor credit rating. Even people who have quite a good credit rating are finding it difficult to get the credit that they need in today’s tight economy.
If you’ve been struggling then a payday loan can really help. No credit checks means that those who have extremely bad credit can still get help when they need it.
Another advantage of a payday loan is the fact that you are not tied to the loan. You pay it back at the end of the month and you no longer have to worry about it. With a longer term loan you have to keep worrying every month whether or not you will be able to afford to make the repayments.
Payday loans are fantastic for use during an emergency. No matter what crops up, you can rely on a payday lender to help you.
There are quite a lot of different payday lenders out there. This means that no matter what your circumstances you should be able to find a lender to suit you. Try to compare at least five local lenders to see which one best suits your needs. What are their requirements and fees? Take your time to find the one with the lowest rates.
Applying for a Payday Loan
It is incredibly easy to apply for a payday loan online. You’ll just need to fill in a few personal details such as your date of birth, employment status and your bank details. This is used to determine whether or not you fit the basic criteria. You will typically need:
- To be an Australian resident
- Be 18 or over
- Be in full time employment
- Have a bank account
As mentioned earlier, other factors such as how much you earn may also need to be looked into. If you fit these criteria then you stand a great chance of getting the payday loan that you need.
While they can really help you out during tough times, it’s extremely important that you only borrow what you can afford to pay back. In the right circumstances they can be a life saver, if you take on more than you can afford, they could potentially ruin you financially.
Featured Personal Loans
| Personal Loan | Details | Min Interest Rate | Min Comparison Rate | Min Loan Amount | Min Loan Terms | Apply Fee | |
|---|---|---|---|---|---|---|---|
 ME Bank Personal Loan | A low rate personal loan from ME Bank with no application fee for a limited time. | 13.59% | 13.81% | $5000 | 1 year | $0 |   |
 Aussie Personal Loan | A smart way to consolidate your bills to save time and money so you can pay for your holiday, a wedding or renovate the house. | 13.90% | 14.84% | $3000 | 1 year | $199 | |
 Sugar Money Personal Loan | Fixed rate personal loan with flexible options to get you funds when you need it. | 13.99% | 15.00% | $3000 | 2 years | $250 | |
 bankmecu Personal Loan | A convenient and fast way to purchase a car or debt consolidation with affordable rates and fees. | 13.49% | 14.55% | $1000 | 1 year | $150 | |
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