Cash Concern


I have seen a number of companies offering to loan small amounts of cash up to $2000. They make it look easy. What are the hidden costs and risks? Are there other options for low-income earners the banks won’t touch?


These are payday loans or small amount loans that must be repaid between 16 days and one year. The credit providers are not allowed to charge interest. Instead they make money from the following fees: A one-off establishment fee of up to 20 per cent; a monthly account keeping fee of up to 4 per cent; a government fee or charge; and default fees or charges.

The maximum amount you can be charged if you fail to pay back the loan is twice the amount loaned (200 per cent), including any repayments made under the contract.

However, the credit provider can charge enforcement expenses if they go to court to recover the money you owe them. See for more information.

Other loan options for low income earners include StepUP loans and NILS loans (no interest loans scheme).

If you are having trouble paying power, gas or water bills, you can negotiate with your utility provider to pay in instalments or go on another payment plan. Financial counsellors give advice on credit and debt issues and can help you negotiate with your creditors. They work in community organisations and their services are free, independent and confidential. Phone the Financial Counselling Helpline on 1800 007 007. They can direct you to your nearest financial counselling agency for a free and confidential appointment.

Relationships Australia SA provides Financial Counselling support, click here for details.

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Relationships Australia SA appoints panels of general practitioners, medical specialists, lawyers, therapeutic and financial counsellors to discuss each letter before the appropriate professional answers it.