Fast personal loans

Generally speaking, fast personal loans work in the same way as standard personal loans, but with a tighter turnaround time. After applying for the loan, you will receive a notification about whether you were successful, including a contract from the lender, and once signed, funds will be deposited.

Some lenders claim that they will approve loans for successful applicants within an hour, and will be able to credit funds by the next business day, if not on the same day. Depending on the bank you are with, some providers even claim that they can deposit funds within the hour once approval has been granted.

If you are considering signing up for a loan, then it is wise to read the product disclosure statement (PDS), a document containing information relating to key features, fee and other costs, benefits and risks. Lenders’ websites will typically have a section dedicated to these kinds of documents, and they should be able to provide an electronic copy on request.

Likewise, it is important to read your loan contract carefully before signing, so you know exactly what interest rate and fees you will be charged and how long the loan term will be.

Payday loans vs personal loans 

When looking for a quick personal loan, you may come across a type of short-term loan called a ‘payday loan’, which are also known officially as a Small Amount Credit Contracts (SACC). However, payday loans typically work differently from personal loans, and have to follow different government regulations.

Payday loans are a kind of loan for an amount of up to $2,000, with a quick turnaround time, and a period of between 16 days and a year to pay back. On the other hand, personal loans are typically used to borrow larger sums and are repaid over a longer period.

Personal loans are structured like a traditional loan, where you are required to pay back the amount you borrowed plus interest, according to a repayment schedule. On the other hand, payday lenders cannot legally charge interest, but these types of loans typically come with extremely high fees and charges attached. This means that if you take one out, you may end up having to pay back significantly more than the amount you borrowed.

Payday lenders may offer loans to people who are in need of money to pay expenses, but who may not be able to get a loan from a mainstream lender, perhaps due to a poor credit score or inability to meet eligibility criteria. However, these types of loans can be extremely risky for consumers. The Government’s MoneySmart cautions strongly against payday loans, and the Financial Rights Legal Centre also warns against them, saying that they can lead to a ‘debt trap’ for people with financial problems.

As with any financial decision, it is important to read and understand the loan’s terms and conditions, including what could happen if you fail to meet your repayments. Documents you should be given access to, for personal loans, includes the full terms and conditions, as well as the Target Market Determination (TMD), which describes who might suit the product. These are typically available on the lender’s website.

Most lenders will have an online application form that you can submit and complete through their website. Eligibility criteria will differ between lenders, but as a general rule, to apply for a personal loan, you will be required to provide documentation such as:

• ID documents such as a drivers licence or passport to prove that you are aged over 18 and an Australian resident.
• Proof of income, typically in the form of pay-as-you-go (PAYG) payslips from your employer, to show that you earn a regular income that is above your lender’s minimum requirements.
• Proof of savings, typically in the form of bank statements, to give the lender a picture of how you manage your finances.
• Your employment details for the past three years.
• A list of any assets you own, including assets such as vehicles and property.
• A list of any debts you may have, such as other personal loans or home loans, credit card debts and credit limits, outstanding buy now pay later (BNPL) balances and the like.
• A list of your general living expenses, including groceries, utilities, streaming services, rent, medical and transport costs, school fees and so on.

You may not need to provide all of this information, although it may be advisable to have it on hand just in case.

Some of the potential advantages of fast personal loans or quick personal loans include:

• The potential for quick access to funds if you need them
• The convenience of applying online

Some potential disadvantages to be wary of include:

• The potential for higher interest rates than standard personal loans
• The potential for high fees and charges
• The potential to end up even further in debt if you take out a fast loan when you are already experiencing financial hardship

The consequences of being unable to make loan repayments will typically depend on whether the loan is secured or unsecured, and it is important to understand the difference between these two things.

A ‘secured’ loan is a loan that is guaranteed by an asset that you own, be it a vehicle or even a property. If you are unable to make your required repayments on the loan, your lender will have the right to repossess this asset and sell it to recover their funds.

An unsecured loan, by contrast, is not guaranteed by an asset, and if you are unable to meet your required repayments, your lender may personally take you to court to recover their funds.

A court judgement will remain on your credit report for five years and can negatively impact your credit score as well as flagging you as a risk to lenders, making it more difficult to get a loan in future.

MoneySmart advises that if you are struggling to pay bills or fines, you have the option of talking to your service provider or the relevant authority in order to see if you can work out a payment plan. If you are struggling financially, then you can speak with a free financial counsellor, who may be able to assist you with such things as negotiating with creditors, developing budget plans or making insurance claims.

You can call the free National Debt Helpline (1800 007 007) from 9.30am to 4.30pm Monday to Friday, in order to be transferred to a financial counselling service in your state. The Mob Strong Debt Helpline (1800 808 408) offers free legal advice about money matters to aboriginal and Torres Strait Islander people anywhere in Australia, and is open from 9.30am to 4.30pm Monday to Friday.