Cash Loans

A Cash loan is a relatively small unsecured loan ranging from a minimum loan of $100 to $5,000 that is repaid over a term from 4 weeks to 2 years. You can apply online as most lenders offer a simple online application form and approval process, with funding often occurring on the same business day.

You can take out these loans for a range of purposes including unexpected expenses or bills, medical expenses, business expenses, car maintenance, utilities and more.

Application Process

Lenders offer these unsecured loans both online and in-store. An online loan application can be completed through online forms, with supporting documents like bank statements retrieved via secure tools. In some circumstances, it is possible to receive an instant decision and have funds in your account on the same business day. For in-store applications, funding usually takes anywhere from 30 minutes to 24 hours from the time of submitting supporting documents (where needed) and signing the loan agreement.

Upon loan approval, cash is usually transferred to your bank account. The time taken to receive the funds will vary, however, if your bank account is NPP-enabled or you bank with certain providers, the money could be with you within minutes. If you completed applying in person, you might have the option to receive cash instead of a bank transfer.

You need to meet the basic requirements to be eligible:

• Be an Australian resident or permanent citizen
• Have proof of identification
• Have a valid mobile number/email address.
• Receive regular income for at least 3 months
• Centrelink benefits do not exceed 20%-50% of the total income depending on the lender.
• Have an active bank account

Lenders will also require 90-days worth of bank statements. This is a regulatory requirement to check your income and borrowing transactions to determine your ‘affordability’ – capacity to pay off your loan on time.

Loan Cost

The typical fees you can incur include:

• Establishment Fees: There is an establishment fee of 20% of the loan amount for loans $2,000 and below. For loans above $2,001, the establishment fee is $400.
• Monthly Loan Fee: For loans $2,000 and below, the monthly fee amounts to 4% of the loan total.
• Interest rates: For loans amounting to $2,001 and above, a maximum interest rate of 48% is included in the payable amount.

Other fees to consider are default and a late repayment fee, which should not exceed 200% of the total loan amount. Be sure to review all fees and costs associated with your loan when you receive your loan contract and before signing.

Repayment Options

These loans are typically repaid in weekly, biweekly, or monthly instalments. Some loan providers such as Cash Converters allow early loan repayments with no penalty, with early settlement reducing the total cost of the loan.

Loan repayment terms are also dependent on the total loan amount, with loans $2,000 and below limited to a  maximum repayment period of 1 year. Loans above $2,000 can be repaid for up to 26 months.

• Revolving credit line/credit cards

Credit cards and line-of-credit offer flexible payment terms and will not impose early repayment fees for the outstanding loans in your account.

• Credit Unions

If you are a member of a credit union, you may make use of credit union loans they extend to their members. While you cannot take out an emergency cash loan with credit unions, you will have longer payment terms and more manageable payment rates.

• Bad credit loans

For individuals who have bad credit history and are not eligible for cash loans, you may consider taking out bad credit loans to improve your credit score or to consolidate your loans. However, bad credit loans usually include a subprime interest rate which covers the risk taken by the lenders in extending the loan to you in the first place.

Advantages

• Loan Flexibility: Borrowers can apply online or to dedicated lending branches for some lenders.
• Quick approval process and release of funds: An application can be completed in minutes, with funding on the same day, depending on the lender and your banking institution.
• Benefits as a repeat customer: If you have previously taken out a loan and met repayments, some providers offer additional benefits on your next loans, such as an increase in credit limit or lower lending rates.
• Beneficial to credit score: Paying off your loans on time will show excellent financial behaviour and will increase your credit score.

Disadvantages

• High delinquency fees: Dishonour fees and late payment fees are usually charged to borrowers if they do not pay on time.
• Frequent applications showing on credit report: frequently applying and getting rejected for small loans will show up on your credit report and can bring your credit score down in the long run.

You should always look for a lender’s Australian Credit License number (ACL) when thinking of applying for a loan. An ACL indicated the lender is authorised to lend money and complies with lending regulations.

Friendly Finance works with a network of direct lenders who all operate with ACLs. Our application process takes a couple of minutes to complete, no credit check is carried out as part of our search process and you’ll receive an instant match decision.

Yes. Your credit score will improve if you pay your loans on time. However, if you fail to coordinate your financial hardships with your lender and you default on payments, the lender may report you to credit reporting agencies and you will get a negative remark on your credit history.

Loans will stay up to 10 years on your credit report if you pay your loans on time. Otherwise, your late payments and payment defaults will show on your credit record for up to 7 years. Credit reports provide detail on your credit payment behaviour and the types of lending accounts you have undertaken in the past. This is an important metric for lenders in determining your capacity to pay off loans in the future.

Payday loans are designed to be paid on the next payday. Hence, lenders are setting the auto-debit cycle for the payday loans to match the payday cycle of the borrower. For Cash Loans, repayment dates can be more flexible with longer repayment periods.

To decide whether you want to have a payday loan or a cash loan, you need to consider if you can pay off your loan with your next paycheck or if you want to have it paid on a preferred schedule.

• Revolving credit line/credit cards: Credit cards and line-of-credit offer flexible payment terms and will not impose early repayment fees for the outstanding loans in your account.
• Credit Unions: If you are a member of a credit union, you may make use of credit union loans they extend to their members. While you cannot take out an emergency cash loan with credit unions, you will have longer payment terms and more manageable payment rates.
• Bad credit loans: For individuals who have bad credit history and are not eligible for cash loans, you may consider taking out bad credit loans to improve your credit score or to consolidate your loans. However, bad credit loans usually include a subprime interest rate which covers the risk taken by the lenders in extending the loan to you in the first place.