$50 Instant Loan
Small and instant loans of short terms are becoming more and more popular when it comes to fulfilling gaps in finances among Australians, and for a very good reason. With as small as a $50 loan, instant fulfilment can be granted, and that can be a lifesaver for some.
If you want to learn more about $50 instant loans and how they can be helpful or what consequences they might have, keep on reading as I explain everything in this article.
What Are $50 Instant Loans?
A $50 instant decision loan is one of the smallest loans you can apply for, and it’s an ideal amount of money to counter a minor setback of cash flow for everyday purposes for individuals.
They’re also pretty great for when a certain opportunity presents itself and when you don’t have the extra cash to finance it.
However, you should understand that often with short-term, small loans, the interest rate or fees can be really high, which can render them essentially useless if the cost of the loan greatly exceeds the cost of waiting for your next paycheck.
What Is a $50 Instant Loan Good For?
Drawing from our experience, due to the reason I’ve mentioned above, sometimes a $50 loan may be a perfect quick fix, but it just isn’t worth it. So, here’s how to sensibly judge whether a $50 instant loan is right for you or not:
- If you’re short on cash and payday is only a couple of days away
- A huge emergency occurred, and you need that amount instantaneously to handle it
- If you know that you’ll be receiving money in the near future but need a quick fix to get through the current gap in your cash flow
Pros of a $50 Short-term Loan
There are plenty of reasons why a $50 instant loan is an ideal way to back you up when you’re facing a financial squeeze, and these include:
- Having very easy and smooth application processes
- Don’t require you to fill any daunting paperwork
- Can be granted without collateral, and don’t ask you to put up any assets against the loan, especially not for a $50 loan
- The lenders don’t have a need to check your credit score for such a small amount of money
- The small amount doesn’t put you at risk of huge interest accumulation
- Quick access to the money as the cash is delivered directly to your account once the application is approved
Does a $50 Loan Affect Credit Score?
Almost all of the time, any borrowing you do is added to your credit file; be it a small loan, credit card, or mortgage. This helps financial entities check the loans you get involved with and whether you are punctual with your repayments or if you miss them.
Most importantly, it helps lenders understand whether you’ve defaulted (failed to repay a loan) before and how often that happens.
If you stick to paying on time and in full, this will increase your credit score, while the opposite is true if you miss a payment or more.
So, the long-term effect on your credit score highly depends on how you manage the small loan, even if it means that it reduces your chances of being approved for more credit during the small loan term.
What Are the Costs Associated With a $50 Instant Loan?
Generally, there are some set numbers when it comes to any short-term loan of a small value, which are capped by the ASIC (Australian Securities and Investments Commission).
These values are 20% establishment fees imposed on the principal and a 4% monthly fee. So, for example, if you’re going to be paying the loan in a month, you’ll be paying back the principal ($50) + the 20% establishment fees ($10) + the 4% monthly fees per month ($2). This adds up to a total of $62.
With such a loan, it’s best if you pay it back within a month, as the monthly fees can add up pretty quickly. Still, if you spread the payments over, say 6 months, it would add up to a total of $72.
Through our practical knowledge, so, it all depends on how much more you’re willing to pay -in terms of monthly fees- to delay the total repayment of the loan. Bear in mind, however, that the longest period to repay such a small loan would be around 90 days.
Who is Eligible for a $50 Instant Loan?
For your application to be processed and approved, there are some general requirements set by the lending entities that you must meet. Most of the time, they include the following:
- Be at least 18 years old
- Be an Australian citizen or resident with a social security number
- Have a bank account verified by the Australian government
- Be employed with a regular source of income and a transaction history, be it an individual account or a small business account
Keep in mind, however, that meeting these requirements doesn’t mean guaranteed approval, as this just gets your application to the processing stage; it could still be rejected.
What Are Alternatives to Small $50 Loans?
Our findings show that, sometimes, it’s just not the wisest thing to take a loan, even if it’s only a $50 one, because of the APR (Annual Percentage Rate), which could be very high, making the loan massively expensive in proportion to the purpose it serves. In those cases, you can consider the following:
- 0% Purchase Credit Cards: A credit card might be a good solution to tide you over if you know you’re getting a cash inflow soon. And the best part with these is that some options provide you with little to no interest offers for the first couple of months. However, you should keep in mind that the APR rises quite sharply after those months, so credit cards are only good ideas for short-term solutions.
- Arranged Overdraft Facility: Sometimes, your own bank can be willing to offer an arranged overdraft, which helps you manage finances when your balance falls below zero. However, you should make sure these are pre-arranged; otherwise, they’ll be very pricey.
- Simply Waiting for Your Own Funds: Sometimes, it’s mere impatience that gets you into the ordeal of loans, and debt can be a very slippery slope. So, you should take the time to think about whether the loan is a good idea or not, even if it’s a small amount.
Now that you have a deeper understanding of very small loans such as $50 instant unsecured loans, I hope you have a better perspective on whether you need it and whether it would be beneficial for you or not.
The most concise method to decide is whether you’ll be able to repay the loan in a short time and in the very near future.
In other words, make sure you’re able to pay it back within 30 days without having to make another loan.