$1,000 Loan

$1,000 loans are small, short term loans, otherwise referred to as "payday loans". Payday loans are not long-term solutions and are generally used in financial emergencies to cover costs until payday. Short-term loans are available to people with both good and poor credit histories. Payday loans come with higher fees and interest rates since they are seen as risky by lenders. If you're looking for this type of loan you should be aware that payday lenders generally charge the maximum fees as permitted by the Australian Securities and Investment Commission (ASIC).

What are the risks of $1,000 payday loans?

• Unreputable lenders. Check the lender has a credit licence and is not charging you more than ASIC allows. The lender should be easily contactable.
• Unaffordable repayments. Consider the size of the regular repayments and ensure the loan is able to be repaid during the loan term. If not, extra fees apply to extend it. Be careful, since repayment periods for these kinds of loans tend to be shorter than regular loans.
• Multiple applications. Every loan application shows up on credit reports. While lenders might not consider credit history, several applications within a short period can have a negative impact on your credit score moving forward.
• Check rates and fees. Establishment and monthly fees are capped, so be wary of lenders quoting prices beyond the legal maximum amounts. Be crystal clear on what will be charged for late payments or a default on the loan. The total cost of the loan matters here - lenders can charge interest rates on top of everything else.
• Long-term repercussions and legal issues. Once the loan agreement is signed, the customer is bound to its conditions until the loan and any associated rates and fees have been paid. Typically these loans are unsecured, which means that the lender can initiate legal proceedings against the customer if they can't repay.

How much will the loan cost?

Loans up to $2,000 that are repaid over a term of 16 days to one year operate under fee caps set by ASIC. Customers will not pay more than:

• Establishment fee: 20% of what you borrow
• Monthly fee: 4% of what you borrow

For example, a loan of $1,000 repaid over a 60 day loan term will cost:

• Establishment fee: $200.00
• Monthly fees: $80.00
• Total to be repaid: $1,280.00
• Fortnightly repayments: (x5) $256.00

Please note that this cost is calculated based on a loan that is repaid on time each month. Payday lenders can also charge high late payment and default fees. If applicants think that they may have trouble repaying a loan, they should perhaps consider an alternative method of procuring finance, such as an overdraft with their current bank.

$1,000 loan eligibility

Eligibility criteria will differ between lenders, but generally lenders require the following criteria to be met in order to consider loan applications:

• Age. Applicants need to be over the age of 18.
• Residency. Applicants need to be an Australian citizen or permanent resident.
• Income. Applicants need to be earning a regular income.
• Centrelink. For applicants who receive Centrelink payments as their whole income or as part of their income, lenders have various criteria that needs to be met.
• Bad credit. Those with bad credit are considered, but many lenders will not accept applicants who are currently bankrupt or under a Part 9 Debt Agreement. However, there are some lenders who might.

Before applying for a loan, applicants should always check that they meet the eligibility criteria to give themselves the best chance of being approved. Loan applications and rejections show up on your credit file, and too many applications and/or rejections are damaging to credit scores, so it is unwise to apply for loans unless you are sure that you will be approved.

How to compare your loan options

There are a number of factors that should be considered when comparing payday loans:

• Fees. There is a cap on the fees that payday lenders can charge, which is set by Australian law. For a $1,000 loan they cannot charge more than a 20% establishment fee and a 4% monthly fee.
• Repayment terms. Generally, payday loans have a very short repayment period. Repayment dates are generally structured around when the borrower gets paid, with the term ranging from 16 days to one year.
• Lender's reputability.It's important to check the reputation of the lender before submitting an application. How easy are they to contact and how transparent are they with their fees and information?

Payday loans pros and cons

How to apply for a $1,000 cash loan

Prospective applicants who have found an appropriate loan and would like to submit an application from the above comparison tables please can click "Go to Site" to be taken to the application page. Most forms take about 10 minutes to complete and applicants will usually find out if they've been approved in a few minutes. When it comes to receiving a loan, it depends on when the application was submitted, and also who the application is with.

Remember to always compare all loan options before applying. There's a multitude of financing options available on the market, so it's important to consider them all before submitting an application.

Frequently asked questions about $1,000 loans

• Am I eligible for a loan?

  The eligibility criteria differs depending on the lender. To see if you're eligible for a loan, simply click on the name of a loan from the table above and review the eligibility criteria.

• Do I need to fax documents in order to apply?

  Most short-term payday lenders operate solely online and have dedicated loan approval systems that make it easy for customers to apply. This means not many lenders require applicants to fax any forms to them – finances and identity are usually verified online.

• How quickly do I need to repay my loan?

  Repayment terms vary, but payday loans are designed as short-term financial solutions and will usually need to be repaid quickly. Most payday lenders schedule repayments so that the entire loan is repaid in 1 - 2 months.

• How do I make a repayment?

  Most lenders will direct debit the specified loan amount on the repayment due date. This direct debit will come from the borrower's nominated bank account. This is the same account into which they receive their pay.

• What are the interest rates and fees charged on my loan?

  All lenders that offer short term loans under $2,000 are restricted as to how much they can charge in interest and fees. For a loan under $2,000 that's repaid in 16 days to one year, applicants cannot be charged more than 20% of the loan as an establishment fee and 4% of the loan as a monthly fee. Fees for defaulting or late payments usually apply and can make the loan considerably more expensive in some cases.

• I'm having trouble repaying my loan – what do I do?

  If someone has trouble repaying their loan, it's important for them to get in contact with a lender as soon as possible – preferably before the loan repayment is due. If they do this they may be able to avoid direct debit dishonour fees and late payment fees, as many lenders might be able to reschedule payments.

Written by

Matt Corke

Head of publishing and editorial

Matt Corke is Finder’s head of publishing ventures. Prior to this he was head of publishing for Australia, New Zealand and emerging markets. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time, he has survived the dot-com crash and countless Google algorithm updates. See full bio