SACC vs MACC Loans: Understanding Your Loan Options in Australia
There are many loan types for consumers such as secured, unsecured, lines of credit, and home loans. However, when it comes to short-term needs, most consumers consider one of two regulated options: Small Amount Credit Contracts (SACCs) and Medium Amount Credit Contracts (MACCs). Understanding the difference is key to making a sound financial decision.
Key Differences between SACC loans and MACC loans
Key Differences | SACC Loans | MACC Loans |
Loan Amounts | Up to $2,000 | From $2,001 to $5,000 |
Term Lengths | 16 days to 1 year | 16 days to 2 years |
Fees and Charges |
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Eligibility Criteria |
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Security |
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What is a SACC loan?
SACC or Small Amount Credit Contracts are government-regulated loans under National Consumer Credit Protection meant for unforeseen expenses, like car repairs or urgent bills. They are quick to get, with repayment terms ranging from 16 days to a year, and capped loan amounts of $2,000. There’s a one-time establishment fee and a monthly fee, but regulations ensure lenders don’t overcharge.
The key thing to remember is that SACC loans are for temporary emergencies, not long-term problems. Lenders are required to check if you can afford the loan before approving it. Since there’s no collateral involved (like a car), it’s important to repay on time to avoid extra fees. If you’re facing trouble repaying, talk to your lender – they might be able to adjust your repayment plan. However, SACC loans shouldn’t be a habit. They’re a safety net for one-time emergencies, not a regular source of cash.
What is a MACC loan?
MACC or Medium Amount Credit Contracts are also government-regulated loans designed for larger expenses than SACC loans. They range from $2,001 to $5,000 and can be repaid over a longer period, from 16 days to 2 years. This makes them suitable for things like appliance replacements, car down payments, or unexpected travel costs.
Just like with SACC loans, lenders are required to make sure you can afford the loan before approving it. Different lenders may have different ways of checking this.
Some people choose MACC loans over credit cards or bank personal loans for similar amounts. However, remember that MACC loans also come with fees, so they might not always be the best option unless you truly need the money for an emergency or unexpected expense.
MACC loans can be Secured or Unsecured
MACC loans can be either secured or unsecured. Unsecured means you don’t need to put up any valuables like a car or house as a guarantee. Secured means you do use an asset as security, and the lender can legally repossess it if you can’t repay it. Even if they sell the asset and it doesn’t cover the entire loan, you’re still responsible for the remaining balance.
The important thing is to only borrow what you can afford to repay, regardless of whether the loan is secured or unsecured. By law, lenders can’t take essential items like beds or appliances if you default on your loan contract.
If you face financial hardship and struggle to repay, talk to your lender. They might be able to adjust your repayment plan under their responsibility to you. But remember, early communication is key to avoiding extra fees.
ADDITIONAL RESOURCES YOU MIGHT NEED:
The Complete Guide to Medium Personal Loans in Australia, from $2,001 to $5000
The Complete Guide to Small Personal Loans in Australia, from $300 to $2000
Pros and Cons
SACC Loans
Pros
Quick access to cash: SACC loans are typically approved quickly, often within the same business day. This can be helpful in emergencies.
Relatively small amounts: Because the loan amounts are smaller, the total interest paid is typically lower compared to larger loans.
Cons
High fees: SACC loans can have high establishment and monthly fees, making the overall cost of borrowing expensive.
Short repayment terms: The short repayment terms (typically up to 1 year) can mean high monthly repayments. This can be difficult to manage on a budget.
MACC Loans
Pros
Larger loan amounts: Compared to SACC loans or payday loans, MACC loans offer a larger amount of money to borrow. This can be helpful for larger expenses.
Longer repayment terms: MACC loans typically have longer repayment terms than SACC loans (up to 2 years). This allows for lower monthly repayments.
Cons
May still be expensive: MACC loans can still have high fees, though potentially lower than SACC loans due to the larger loan amount.
Can be tempting to borrow more: The larger loan amount might tempt you to borrow more than you can afford to repay.
Alternative Loan Options
Beyond SACCs and MACCs, here are some alternative financing options in Australia for short-term or medium loans:
Bank Personal Loans: Many banks offer personal loans with competitive interest rates and longer repayment terms than SACC or MACC loans. These can be a good option for larger expenses that need to be paid back over time.
Credit Cards: Credit cards can be an option for smaller purchases or unexpected bills, but be mindful of high interest rates and fees if you don’t pay your balance in full each month.
No Interest Loan Scheme (NILS): For eligible low-income Australians, these loans are offered by community organizations for essential goods and services with no interest or fees.
Community lenders: Community lenders and financial institutions such as credit unions or mutual societies may offer small, unsecured loans with lower interest rates than SACC or MACC loans. These lenders may be more understanding of your circumstances.
Choosing the Best Option
The best choice depends entirely on your personal circumstances. Before you apply, ask yourself:
How much do I really need? Only borrow the absolute minimum required.
Can I comfortably afford the repayments? Create a budget to ensure the loan won't strain your finances.
Have I shopped around? Compare interest rates, fees, and loan terms from multiple lenders.
Do I understand all the fees? Be wary of any loans with high establishment or ongoing fees and read the contract carefully.
If you’re struggling financially, free and confidential financial counselling services are available from the National Debt Helpline at 1800 007 007.
Lenders Offering SACC and MACC Loans
Fundo
Fundo offers short-term loans with a streamlined application process. To qualify for a loan, you must meet the following criteria:
Be at least 18 years old
Be a citizen or permanent resident of Australia
Earn a regular income of at least $300 per week (before taxes and not including government benefits)
Demonstrate your ability to meet the loan repayments
Not be in a financial situation where the loan will cause undue hardship
The exact documents will typically depend on the lender or the loan type. Visit the Fundo website to know more.
Plenti
Plenti offers personal loans and car loans. Here’s a summary of the eligibility requirements to get a loan:
Be at least 18 years old (in some cases, 21)
Be an Australian citizen or permanent resident
Have a regular source of income
Have a good credit history
For most loan applications, you’ll typically need:
Basic contact details
Driver’s license
Proof of income (bank statements, payslips)
The exact documents required may vary depending on your circumstances and the loan type. It’s always best to refer to Plenti’s website for the most up-to-date information.
Credit 24
Credit24 offers personal loans and lines of credit. To be eligible for a Credit24 loan, you must meet the following basic requirements:
Be an Australian citizen or a permanent resident
Be at least 18 years old
Have a regular income of at least $600 per month
Have a decent credit history
It’s important to note that the information above may not be exhaustive. For the most up-to-date eligibility requirements, it’s always best to refer to Credit24’s website or contact them directly.
Wallet Wizard
Wallet Wizard states that they welcome all applications and believe everyone should be able to get cash fast with a Smart Loan. The minimum requirements to apply are:
Be 18 years or older
Be an Australian resident
Have an income
While Wallet Wizard says they welcome all applications, they do assess your financial situation and income to determine if you qualify for a loan and the amount you can borrow. They also perform a credit check as part of the application process.
Cash Train
Cash Train considers your ability to repay the loan when reviewing applications. While they don’t have a strict minimum credit score requirement, a good credit history can help.
Here’s a summary of the general eligibility requirements to get a Cash Train loan:
Be over 18 years old
Be an Australian resident
Have a regular income. Cash Train does not specify a minimum amount but considers your ability to repay the loan.
Be employed (part-time and casual are accepted but self-employed are not)
Provide proof of income and ID
It’s important to note that Cash Train states they assess applications on a case-by-case basis. This means they consider your circumstances, not just the above requirements.
Ultimately, whether a SACC or MACC loan is right for you depends on a careful assessment of your needs and repayment ability. These products can be a lifeline in a genuine emergency but are an expensive solution for casual spending. Always compare lenders, understand the total fees involved, and remember that responsible borrowing is key to your financial health. If in doubt, professional resources like the National Debt Helpline are available to provide free, impartial guidance.
If you are still looking for a loan and don't know where to start, you can apply through Friendly Finance.
