It is not uncommon for Australian employees to face financial problems, and this is despite the relatively good performance and state of the country’s economy. While there are many who earn adequately, there will always be unforeseen expenses, which may put them in a bad position. Because of the importance of having savings, it is very important for employees to be more discipline in their spending. However, there could and would be times wherein employees can’t help it but to spend their hard-earned savings for things that need urgent attention, such as medical emergencies, payment for bills, and family or personal related matters. Because of this, employees have nowhere to go but to apply for loans, such as payday loans.
So, what are these loans anyway? Basically, they are short term loans that let the borrowers get small amount of cash in order for them to have money until their next payday. Additionally, they are unsecured loans and relatively easy to obtain. From the name itself, these loans are usually repaid until the borrower gets his or her next paycheck. Because of this, these loans are most suitable and helpful to employees who run short of money while expecting for their next paycheck.
Companies that do offer payday loans would have varying terms and conditions, but they do share the same concept such as mentioned above. In order to truly appreciate the benefits of these loans, it is important that some factors are discussed and reviewed.
- Eligibility – Australian employees who wish to apply for this type of loan should meet the minimum requirements set by lending companies, such as age, occupation, and checking or savings account. While credit history is also checked, not all companies require it. Hence, you can still apply for this loan even if you don’t have the most decent credit history as long as you can prove that you are capable of paying the loan.
- Online application – When payday loans have become significant in the financial sector of the country, the common practice was that applicants have to go to lending stores or establishments to apply and to get their borrowed cash. However, since online banking and online lending have become common, lending companies are now offering online services to cash advance applicants. Payday loan institutions do not just operate 24 hours day, 7 days a week; they offer online applications for those who want to avail of the loan. Indeed, by going online, employees don’t get to face the inconvenience of braving the long lines just to be granted the desired loan amount.
- Loan limit – It is important for borrowers to only aim for an amount that they truly need. Applicants should keep in mind that lending companies limit the amount that can be borrowed at a time depending on the employees’ income. In other words, it is not advisable to avail of a loan that could very well end up in debt.
- Interest rates vary – The interest rate for payday loans or cash advance vary depending on the terms and conditions applied by the lending firm. This is why it is extremely important for borrowers to understand the terms so they don’t end up being surprised by the amount of money they have to pay.
Employees wanting to avail of payday loans must be aware of one thing, and that is the fact that these loans are just for emergency situations. Truly, it is not suitable for long term financial issues. Making certain considerations with regards to this short term loan is important so as not to come across potential financial problems in the future.