Quick Loans Explained
Quick loans are unsecured loans offered by lenders with a turnaround time of 60 minutes to 1 business day. Loan amounts for quick loans range from $100 up to $5,000 for some lenders. The loan term generally depends on the total amount but loans below $2,000 may be paid over 16 days to one year, while loans up to $5,000 may be paid over 2-5 years. You can use a quick loan for a range of purposes, including (but not limited to): car maintenance, utility bills, medical expenses, education or training courses.
Depending on the lender, your application might be accepted in minutes. Some lenders also offer money within a few hours or the same working day. These loans are defined by small loan amounts, short loan periods, and high fees.
The following are the product features of quick loans:
Quick turnaround time
Quick cash loans often have a turnaround time and fund relase period of 60 minutes to one business day depdning on the lender and on the time of applicaiton of the borrower.
Smaller loan amount
Loan amounts typically range from $100 to $5,000 depending on the limimt set by the lender.
Shorter loan term
Depending on the lender and the amount taken, the loan term ranges from 16 days to 60 months.
How to Apply
You can apply 100% online for a quick loan. Loan applications are simple and only take a few minutes to compete. Whilst every lender will have unique lending criteria, you will need to meet basic criteria in order to be eligible. This includes the follow:
- A regular income, with Centerlink benefits not exceeding 50% of the total income.
- Permanent Resident in Australia
- An active bank account
- 18 years of age or older
Lenders will consider applicants with a bad credit score.
You will need to provide the requested loan amount, personal details (such as address, DOB, contact information) employment details and your latest 90-day bank statements. All responsible lenders will request this information to assess your ‘affordability’ – capability to repay your loan. You may also be required to provide additional supporting documents before receiving your loan agreement, such as proof of ID and/or income.
It is possible to receive your loan funds the same day. Here is breakdown of processing and fund release times from some of the top lenders in Australia.
|Lender||Loan Application||Release of Funds|
|Cash Train||Up to 10 minutes||1 – 2 business days|
|Wallet Wizard||Up to 60 minutes||2 hours (if the process is completed before 2:30PM)|
|Sunshine Loans||1 – 2 business days – 1 business day||Credit24: 1 – 2 business days, 1 – 2 business days|
|MoneyMe||Up to 60 minutes||1 – 24 hours|
|MoneySpot||5 minutes||up to 60 minutes|
|Nimble||1 – 2 business days||1 – 2 business days|
|Fair Go Finance||6 minutes – 1 hour||1 business day|
What are the fees involved?
Responsible lender entities will abide by the loan fees set out by ASIC. These are:
Interest rates: interest rates apply to loans $2,001 and above. The maximum interest rates are set at 48% per annum.
Monthly Fee: maximum monthly fees for loans $2,000 and below are set at 4% of the loan amount.
Establishment Fee: one-time establishment fees for loans $2,000 and below are set at a maximum of 20% of the loan amount, while loans amounting to $2,001 and above will have a maximum establishment fee of $400.
Other fees may also include:
Default fees: If you skip a payment or fail to repay the debt, the creditor cannot recover more than 200 percent of the loan amount.
Enforcement expenses: These are the changes paid by the credit provider if going to court to reclaim the money owed under the credit contract if you default on payments.
What are the Advantages of Quick Loans?
Quick-release of application results: loans are typically released within an hour to a business day. This is ideal for those looking for an emergency loan or those who are in a poor financial situation.
Loan disbursement time: Loans are disbursed within hours once the application is approved and the contract documents are signed and submitted by the borrower.
Unsecured Loans: you do not need to put up collateral against the amount borrowed.
Online applications: most lenders are now offering 100% online application via the online application form or downloadable app.
Improve credit score: staying on top of repayments time will show positive financial behaviour and will improve your credit score.
How do repayments work?
Loan repayment terms are governed by the amount borrowed. ASIC stipulated that loans below $2,000 need to be repaid within a 16-day to a 1-year payment period. Loans between $2,001 and $5,000 can be repaid from 16 days to 2 years. For an online loan above $5,000, payment terms may exceed 2 years.
Typically as with other types of loans, you need to make your payments either as weekly repayments or monthly repayments, via direct debit.
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What happens when you can't repay a quick cash loan?
If you are unable to fulfil your repayments for a quick loan for whatever reason, you must inform your financial provider as soon as possible. Most lenders have financial hardship policies in place specifically for situation will encouter payment difficulties. You and your lender may be able to work out a more convenient payment plan or temporarily freeze your repayments. If you do not meet your loan repayments without providing notice to the lender, th elender may take legal action against you. It can also submit the debt to a credit reporting agency as a dishonour or default, such as Equifax, and hire a debt collector.
How can you be sure you can afford a quick loan?
Before you apply for a loan, make sure to check your expandable income using a budget tracker for the month or on a weekly basis., While quick loans may be used to cover immediate expenses, the monthly fees, establishment fees, and other associated fees on this type of loan mean that they are ideally used for emergency cases only, and not to cover daily expenses. You should also allow for unexpected bills and expenses to fully ensure you are in a stable enough position to apply for a loan. You should try to check for the loan contract before you sign any loan undertaking to prevent yourself form incurring unnecessary expenses.
Lenders will determine your payment capacity based on the documents and income/bank statement that you will provide to make sure to provide lender with truthful and comprehensive information. Lenders will know if you have had financial difficulty as it will be reflected on your credit check.
What are the Alternatives to Finance Options?
The following are the alternatives that can help you with your cash flow:
No interest loan: 170 local community organisations in 600 places around Australia provide no-interest loans. You may borrow up to $1,500 with a loan period of 12 to 18 months with these loans. These loans have no interest rates and no fees or levies. You will only be required to return the amount borrowed.
Centrelink Cash Advance: You may be eligible based on your length of contribution with Centerlink and the amount you receive as payments.
Pay on-demand apps: A pay-on-demand loan is a short-term loan. You can use it to borrow a portion of your salary before your actual payday. It is provided by banks, pay-on-demand apps such as Beforepay, and employer-provided systems such as InstaPay.
Quick Cash Loan FAQs
Yes, if you pay on time, your credit score will improve and will give you more access to other loan instruments. However, if you default on payments and do not make necessary adjustments with your lender, the lender may report you to credit reporting bureaus.
If the lender records the account’s most recent status as paid as scheduled, quick cash loans can linger on your credit history for up to ten years. Late payments, on the other hand, can linger on your credit record for up to 7 years from the date of delinquency. A credit report is a description of how you have managed credit accounts, including the types of accounts and your payment history, as well as some extra information sent to credit agencies by your lenders and creditors. This is an important indicator for lenders when deciding whether or not to give you money, and lenders will run a credit check before giving out money.
The following are the risks associated with borrowing cash instantly:
High-interest rates: These loans are often associated with high-interest rates. However, fees for loans are regulated by the Australian Securities & Investments Commission (AISC) and should not exceed the set fees and interest rates on these loans.
Multiple applications showing up on the credit report: Applying to multiple lenders in a short space of time and impact your credit score. The fast turnaround time may be appealing but all loan applications should still be made in moderation.
High delinquency fees: While still regulated by ASIC, fees on late payments and dishonour fees are typically high.