Why Australia is the Best Country for Payday Loans
By Space Coast Daily // October 6, 2021
I know you must have heard about payday loans in the past. It can be either you heard from a friend or you searched for it personally. A payday loan is a short-termed loan that you get and repay during the next payday.
In this crushed economy, payday loans tend to play a significant role in Australian people and worldwide. But why does Australia stand out in the countries that allow payday loans to the citizens?
Even though payday loans have very high-interest rates, the lenders never lack clients who need them. However, as a result, the regulating authorities have banned payday loans in most countries due to the high interest rates.
And that fact brings us to reasons why Australia is the best country for payday loans. Now, let’s see why most payday loan borrowers n Australia seem to be satisfied.
Reasons why Australia stands out in the payday loan market
■ There are no interest rates
The Australian payday lenders regulation has warned payday lenders not to charge any interest rates to the borrowers. Instead, payday loan lenders should charge a one-off fee of 20% and a monthly fee of 4%.
Charges that payday lenders charge the borrowers
In addition, the Australian Securities and Investment Commission (ASIC) states that payday lenders should only charge the borrower the following charges.
■ A government fee, but most lenders don’t charge that
■ If the borrower pays late, the lender should charge late payment fees
■ In case of default, the lender has every right to charge you collection fees
On the other hand, the other countries allow payday lenders to charge more than 400% interest rates on their payday borrowers. And that’s a very high cost considering that you will repay in at least two weeks.
However, unlike Australian payday lenders, lenders in other countries charge high interest rates. So if you pay the loan late, the lender doubles the interest rates. And that, in turn, results in a debt cycle.
Consequently, it’s easier to manage a loan without interest rates compared to the high-interest rates.
■ There is strict regulation in Australia
No lender cannot hide behind the curtain while giving Australians loans without passing through the ASIC. And that’s a good show that the Australian government cares for its citizens.
Over the years, payday loan lenders have migrated from analog to online lending, which has increased their borrowers.
With payday loans characterized with high-interest rates, the Australian government had to do something about stepping in the middle—between lenders and borrowers. And it came up with regulation rules to govern the ever-growing payday loan money market.
The most important bill that the Australian government passed is the no-interest bill. The government preferred lenders only to charge one-off fees.
The 2010 National Consumer Credit Protection Act (NCCPA) covers all payday lending in Australia. Therefore, as an Australian, you should not worry because your government ensures that you don’t get into a debt trap. The chances are you will get a payday loan of up to $2000 and repay in smaller installments.
■ No credit checks
In the current economy, people are drowning in debts hence having terrible credit scores. In addition, banks and some other lending institutions require their borrowers to have good or excellent credit scores before loan application.
In contrast, no credit check payday loan lenders do not run any credit checks while giving you a loan. The Australian lenders are not exceptional—they also don’t charge interest rates.
So, having a bad credit score is not a reason to lack money for your emergency expenses. All you do is prove that you have a steady income flow and can afford to repay the loan.
Get the money fast
Most Australian Payday lenders process your loan within a few hours. So, in case you have a very pressing emergency, you can always rely on them to get fast cash within a short while.
After proving that you can repay the loan, there is no other reason to hold them from giving you a loan. In addition, the lenders will allow you to choose a suitable payment plan that you can adhere to it. And most lenders will enable you to repay over one year.
The bottom line
Getting a payday loan in Australia is cheap and less risky. It’s better to take a payday loan with a one-off fee than the one with high interest rates. Remember, the interest rates double if you pay the loan late.
