Our brokers work hard at understanding our client’s unique circumstances and helping them overcome common home loan challenges. Whether you’re a first home buyer or an experienced investor, we’ll help you find the best home loan for your situation. Whether you’re self-employed and have trouble proving your income or you’re a contractor or casual worker, we offer solutions for all types of clients’ income sources.
If you’re looking for short-term loans in Melbourne, you can take out a short-term cash loan, or a short-term personal loan. Both of these options have their own advantages and disadvantages, so it’s important to choose the right one for your needs. If you’re in the market for short-term cash loans, talk to a qualified broker from Break Free Home and Car Loans. We can help you apply with the right lender so you can get affordable, fair short-term finance suited to your needs.
What Is A Short Term Loan?
Loan Amount
General Requirements
- Be at least 18 years old.
- Provide proof of income of at least $350 per week. Alternatively, you must meet minimum turnover requirements if you are a business owner seeking a short-term commercial loan.
- Your source of income must come from a part-time or full-time job.
- Lenders prefer stability and would like to see a steady employment history.
- Meet lenders’ minimum requirements from credit scores to being non-affiliated to any bankruptcy or debt agreements.
- You may receive government benefits such as Centrelink, but your income cannot be solely derived from Centrelink or pension.
How Much Do Short Term Loans Cost
In fact, short-term loans are one of the most expensive forms of credit. They cost more than traditional personal loans. While there are restrictions for interest charges placed by Aussie lenders for small short-term loans less than $2,000, a larger loan may incur exorbitant costs and cause financial stress. Lenders will charge fees instead, which can add significantly to the total cost of the loan. Typically, these are capped at:
- 20% of the loan amount for an establishment fee
- 4% of the loan amount for monthly account-keeping fees
There may also be other fees applicable for short-term instant loans, including:
- Government fees such as government duties, this is slightly less common.
- Default fees. This is charged if you miss a payment or fail to pay. They can go as high as 200% of what you borrow.
- Enforcement expenses. These are charged if you default on the loan to cover the cost of going to court to recover the debt you owe.
For instance, a $1,500 short-term cash loan for 12 months will cost:
- $1,500 for the total loan amount
- $300 in establishment fees
- $720 in monthly fees
The total cost of the loan inclusive of fees will be $2,520. Your fees alone make up 60% of the loan amount. The fee structure for short-term loans with larger amounts will differ, however.
How To Apply For Short Term Finance?
- Details of your regular income from bank statements and payslips. For a business owner, this would be a financial statement, tax returns, and cash flow documents.
- Any government benefits you may be receiving.
- Personal identification documents such as a driver’s license, proof of age card or passport.
- Bank account details such as your bank, account name, BSB and account number.
Is It Possible To Get Short Term Cash Loans?
- Be over 18 years old
- Have a regular income
- Have an Australian bank account
- Have a good credit rating
Once you’ve met these requirements, you can apply for a short term loan online or in-person at a branch. The application process is usually quick and easy, and you’ll often get a decision within 24 hours. If your application is successful, the money will be deposited into your account and you’ll be able to start using it straight away. Short-term loans are typically repaid over a period of 3-12 months, so you’ll need to make sure you can afford the repayments before taking one out.
Using Short Term Personal Loans
Expenses Before Payday
Urgent Home Repairs
Unexpected Bills
Emergencies
Short Term Loans VS Long Term Loans
The following are some considerations you need to keep in mind when deciding between short-term loans and long-term loans:
- Short-term loans are typically for smaller amounts of money than long-term loans.
- Short-term loans have higher interest rates than long-term loans.
- Short-term loans need to be paid off within a few months, while long-term loans offer longer repayment periods.
- There may be less strict lending criteria with short-term loans, sometimes you can even be waived from a credit check.
Alternatives For Short Loans
Credit cards
Personal lines of credit
Rent-to-own agreements
You can find finance or refinance rent-to-own agreements for a number of properties, cars, machine assets, equipment and other personal or commercial purchases.
Peer-to-peer loans or private lending
Crowdfunding
Crowdfunding can be another option to raise funds. You need to take into account any donation fees or other charges that may apply as they’ll affect your fundraising goal.
Long term loans
You can cosign a loan with a creditworthy cosigner or guarantor to qualify for long term loans if you don’t have sufficient income or credit rating.
Secured loans
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Frequently Asked Questions
What Are Short Term Money Loans?
A short term money loan is a type of unsecured loan that can help you access funds quickly and easily. They are typically used to cover unexpected expenses or bridge the gap between paydays, and can be a great option if you need access to cash fast.
Short term loans are usually repaid over a period of 3 months, although some lenders may offer terms of up to 12 months. The repayment period will be agreed upon when you take out the loan, and will be based on your individual circumstances. Be sure to compare different lenders to get the best deal. And always remember to repay your loan on time to avoid late fees and penalties.
How Much Does A Short Term Loan Cost In Melbourne?
One of the most costly types of credit is short-term funding. They are more expensive than traditional personal loans. While Aussie lenders may limit interest charges for small, short-term loans less than $2,000, a bigger loan might result in prohibitive costs and financial strain. Fees will be charged instead by lenders, which can significantly raise the total cost of your loan. These may include:
- Establishment costs — which can go as high as 20% of your loan for smaller loan amounts.
- Monthly account-keeping fees — these are capped at 4% for smaller loans.
- Default fees — which can go as high as 200% of what you borrow if you miss a payment or fail to repay your loan.
- Enforcement expenses — lenders can ask you to pay for the cost of going to court to recover the debt you owe if you default on their loan.
Which Loan Is Better Short Term Or Long Term?
- Quick and easy access to cash: You can often get your hands on the cash you need within 24 hours or less. This can be crucial in emergency situations where you need money fast.
- Flexibility: Short-term loans can be used for a variety of purposes, from consolidating debt to financing a vehicle you need to home repairs. This makes them much more versatile than other types of loans.
- No collateral: Short-term loans are unsecured, meaning you don’t need to put up any assets as collateral. This makes them accessible to a wider range of borrowers.
- Convenient repayment terms: Short-term loans usually have shorter repayment terms than other types of loans, so you won’t be stuck in debt for years.
However, they also come with a number of restrictions and extra costs such as:
- Higher fees: This can include service fees, establishment fees, monthly account-keeping fees, and other charges such as penalty fees or duties.
- Higher interest rates: Short-term loans are known for charging high-interest rates. This can be as high as 48% of your total loan amount.
- Higher monthly repayment: Because the repayment terms are much shorter than long-term loans, you will need to make higher monthly payments to pay off your loan sooner.
No matter which option you choose, make sure you compare different lenders to get the best deal. And always remember to repay your loan on time to avoid any late fees or extra interest.
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