Are you looking for instant cash loans to help you get by just in time for your next payday? Have you tried borrowing money from your family and friends but to no avail? Fortunately, there are payday loans in Australia that you can turn to if you are in this kind of scenario. There are several non-bank lenders that offer short-term cash advances to individuals who are willing to pay interest rates and other related fees just to secure immediate cash.
In the past, consumers were reluctant to do business with payday loan lenders because of the risks and costs associated with it. Today, things have changed. The Australian government has set in place certain laws that will protect borrowers in need of instant cash. Australia’s National Consumer Protection Act 2009 have helped lessen the concerns of consumers regarding the possibility of dealing with shady lenders through the implementation of the Consumer Credit Legislation Amendment Bill 2012.
The recent government regulations protect people who are willing to pay excessively high-interest rates to secure the urgent cash that they need and prevent them from falling into a debt trap. For those who are in need of money to pay emergency utility bills, they should ask about Centrelink advance or inquire about the utility company’s policies regarding payment during times of financial hardships. The government also offers financial help for people and families who have no cash to purchase basic commodities like food and vehicle repairs. Even unemployed individuals can secure financial assistance from the government. Programs like LILS (Low-Interest Loan Schemes) and NILS (No Interest Loan Schemes) aim to help low-income Australians.
There is also a recent government regulation that puts a cap on the interest rates and late payment fees imposed by lenders on short-term contract loans. There are also laws in place that deals with the risks taken by consumers when seeking for refinancing their short-term cash advances. This practice is prohibited because when consumers extend or apply for a new loan even though they already have one, they face a higher risk of undergoing a “debt spiral.” The amount they owe will continue to pile up until such time that they would have a really hard time getting out of it. Because of this, lenders must provide their clients with the needed information about other possible alternatives that could help them meet their financial needs.
There are also instances wherein a borrower can secure alternative financial resources. Before applying for instant cash, it is best to first consider community organizations. There are some that offer no or low-interest rate loan programs that can help refinance high-interest rate cash advances.
Let us now tackle the basics of payday loans. It is basically a cash advance that is expected to be repaid between 16 days to 1 year. The cash borrowed can be paid either by a direct debit from one’s bank account or an immediate deduction from the borrower’s pay. It is, therefore, important to make sure that there is sufficient cash in one’s account to cover the repayment of the instant money and other expenses. As stated by the law, lenders are required to review the borrower’s financial situation before their application is approved. In general, they require borrowers to submit documents like payslips, copies of bills, credit contracts or statements of accounts as well as rental statements. The number and the type of documents would vary. It would rely on some factors like if it is the first time they are doing business with you.
For borrowers, there are calculators available online to help compute how much their cash advance will cost. They should also know about the limitations on fees. For instance, borrowers should only be charged with a one-time establishment fee and monthly account keeping fee of 20% or 4% maximum, respectively. Credit providers should only charge a government fee and enforcement expenses in case you default on your repayments.
Borrowers should also be aware of default fees. These are charges made when you fail to pay. This goes on until the outstanding amount is paid in full. If you in any situation encounter this, the lender can charge you as much as 200% the full amount of the loan. Because of these, you need to know and understand very well the possible things that would happen and the fees that should be paid if you fail to pay your instant cash. However, there are things that they are not allowed to charge interest on the loan, direct debit fees on payday loans entered into from Feb. 1, 2017. Meanwhile, there are also certain limits. The caps on fees are not applicable to loans offered by ADIs like those from banks, building societies, or credit unions.