Fast personal loans: What to watch out for

If you need cash quickly, you may be considering taking out a ‘fast personal loan’ or ‘quick personal loan’ from an online lender. But before you do, it’s important to understand that these types of loans can be expensive.

In this article:

What is a fast personal loan?

Like the name suggests, a fast personal loan is a loan that is designed to be approved and sent to the borrower as quickly as possible.

Fast personal loans are typically offered by online lenders (rather than traditional lenders like a bank) and are normally for small amounts of money compared to other personal loans. For example, a fast personal loan could have a maximum amount of up to $2,000 or $5,000, depending on the lender. They also typically have a short loan term, which is the amount of time you have to repay the loan.

How long does it take to get a fast personal loan?

Many providers say they can get the money into the borrower’s account within an hour to one day after their application is approved. The application process is typically done online and many providers say they offer same-day assessment and approval.

When applying for a fast personal loan, you will typically be asked to provide bank statements, proof of income (such as recent payslips or Centrelink statements), information about your living expenses and details of any other loans you have. The lender may also conduct a credit check on you, as is the case with most personal loans.

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How much do fast personal loans cost?

There are limits imposed by the Australian Government and the regulator ASIC as to how much certain lenders can legally charge borrowers for personal loans, including fast personal loans. However, be aware that these types of loans can be very expensive even with these limits, and that a number of fast personal loan lenders may charge the maximum amount permitted. Before applying for a fast personal loan, make sure you clearly understand what the costs are.

Loans up to $2,000

For short-term loans of up to $2,000 (also known as short-term or payday loans), at the time of writing lenders can charge an establishment fee of up to 20% of the amount borrowed and a monthly fee of up to 4% of the amount borrowed, as well as additional default and enforcement fees if you fail to pay back the loan. Borrowers have between 16 days and one year to repay these loans.

Loans between $2,001 and $5,000

For loans of between $2,001 and $5,000, lenders can charge a one-off fee of up to $400 and an annual interest rate of up to 48% p.a., including all other fees and charges. Borrowers have between 16 days and two years to repay these loans.

Loans over $5,000

For loans of over $5,000, lenders cannot charge more than 48% in fees and charges. Borrowers usually have over two years to repay these loans.

These limits and caps do not apply to authorised deposit-taking institutions (ADIs) such as banks and credit unions, ASIC says, but they do apply to non-ADIs such as the sorts of lenders who typically offer fast or quick personal loans.

Keep in mind these types of loans typically charge much higher fees and cost more over the repayment term than other personal loans, so it is worth shopping around to determine your options before selecting a loan. For example, Moneysmart says a $2,000 payday loan over one year will cost about $3,360, meaning you pay $1,360 for the convenience of the quick loan.

It is also a good idea to look at the repayments and determine whether you need the money quickly or would be happy to wait a little longer for a potentially cheaper price tag from a more traditional personal loan.

What are the pros and cons of fast personal loans?

Here are some of the potential pros and cons of fast personal loans to consider:


  • Can provide quick access to money.
  • May be more readily available than a traditional personal loan if you have bad credit.


  • Often have very high fees and/or high interest rates.
  • Often have shorter repayment periods, so it’s important to make sure you can afford to make the regular repayments.
  • If you are unable to make your repayments, this could have a negative impact on your credit score. This can occur with other loans too, but the often-higher costs of fast personal loans could make it trickier to keep up with repayments.
  • If you make multiple applications for loans within a short space of time, this could have a negative impact on your credit score.

What are some alternatives?

Before applying for a fast personal loan, it’s important to consider all your other options and whether there is a cheaper way for you to access cash. Depending on your circumstances, you may be eligible for:

  • A no-interest loan: The No Interest Loans Scheme (NILS) provides loans of up to $1,500 that can be used to purchase essential goods and services, such as fridges, washing machines, car repairs and medical procedures. These loans charge no interest or fees.
  • A Centrelink advance payment: If you are receiving an eligible payment, such as the JobSeeker payment or the Age Pension, you may be able to apply for an advance payment. You then pay back the payment out of your future payments.

If you need urgent help with money, there are charities and community services that offer emergency relief for people experiencing financial distress or hardship. Centrelink also offers crisis payments in some circumstances, including severe financial hardship.

You might also want to speak to a financial counsellor, who can offer free, independent and confidential advice. You can speak to one by calling the National Debt Helpline on 1800 007 007.

Cover image source: Thares Luangruangrong/

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This content was reviewed by Sub Editor Tom Letts and Finance and Lifestyle Editor Shay Waraker as part of our fact-checking process.

Tamika covers personal finance for Canstar, specialising in banking and general insurance. She joined the team after completing a Bachelor of Journalism and Bachelor of Laws (Honours) at QUT. She has previously written for a range of news, music and arts publications.

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