How to Get Payroll Loan Advance In Australia

Many Australians struggle with their bills, so they resort to different kinds of loans. While many go for personal loans, some choose payroll loans because it’s easy to apply for one.

Specifically, payroll loans are a popular option for Australians who need to borrow money but don’t have the credit score required by banks. 

If you’re planning to get a payroll loan advance but don’t know much about them, we’re here to help you. We’ll talk about everything there is to know about payroll loans.

What this article covers:

What Is a Payroll Loan?

A payroll loan is a short-term loan offered by employers or other financial institutions. It’s also called an interim loan or a cash advance on the payroll.

payroll loan advance

Payroll Loan Advance Eligibility

Although various lenders have varying requirements, applicants should typically meet the following minimal requirements:

  • Be older than 18 years old
  • Be an Australian citizen with a permanent address
  • Obtain a consistent income

Applicants must give the lender 90 days’ worth of bank statements, some sort of identification, job information, copies of their bills or Centrelink receipts, and information about their income, such as how much they make each week.

Where Can I Get a Payroll Loan?

If you need a payroll loan, the most likely place to get one is from your employer. 

When you get a payroll loan from your employer, it’s important to make sure that you understand all of the terms and conditions.

You’ll want to ensure that there’s less interest charged on your pay advance loan and that there are less severe penalties if you can’t repay it in full at the end of each month (or whatever other time period).

advance payment salary

However, you can only get a payroll loan if your company has a payroll loan plan. If they do, they’ll have an employee portal or other way of providing information about the plan to their employees. 

You should check with your employer to see if they offer this service and how to sign up for it if they do. Many third-party lenders offer this type of short-term loan if your company does not offer a payroll loan plan.

You can get a 200 cash advance from them, and it can even get higher than that. 

Payroll Loan Fees and Other Rates

Since payroll lenders are not permitted to charge interest, they compensate by levying fees.

For loans under $2,000 with maturities between 16 days and one year, payroll lenders are only permitted to impose the following fees per the Australian Securities and Investment Commission (ASIC):

  • A one-time setup charge that can be up to 20% of the lent amount
  • An account-keeping charge per month of up to 4% of the borrowed amount
  • A fee imposed by the government
  • Fees or fines for default that can reach up to 200% of the loan’s entire amount
  • The cost of enforcement if the lender has to take you to court for failing to repay the loan. These costs have no upper limit.

As you can tell, payroll or cash advance loans are among the priciest types of loans since they approve borrowers whom most lenders would turn down.

payroll loan fees

Should I Get a Payroll Loan?

Although they may seem a good option, it’s advisable to steer clear of payroll loans altogether if possible. If you’re tight on cash, there are alternatives:

  • Go for Centrelink. If you qualify for Centrelink assistance, you can get an advance payment on your benefits without being charged interest.
  • Negotiate with your utility provider: If you’re having problems paying your bills, most providers have personnel who can assist you in working out an alternate payment plan, such as paying off your account in smaller instalments.

It’s also tempting to get a cash advance til payday if there’s something that you’d like to buy. In this case, hold out a little longer and wait for your pay instead. 

What to Do If You Can’t Repay Your Payroll Loan?

The first thing you should do is get in touch with your lender and let them know you fear you won’t be able to make your next instalment. 

Some lenders have departments that can assist you in times of need and postpone the subsequent, direct debit payments. 

This will prevent your bank from charging you for a missed payment, as will the lender.

Following that, reviewing your spending plan and putting aside enough cash to ensure that you have enough in your account to make the payments is essential. 

payroll loan

If you still don’t believe you’ll be able to afford your repayments, you should get in touch with your lender again to explore your choices.

The worst course of action would be to fail to make the payments or obtain another payroll loan, which would increase your debt.

Conclusion

Getting a payroll loan or advance payment salary is a convenient way to manage unexpected expenses, as long as you’re careful about how much you borrow and what you use the money for. 

While payroll loans are quick and easy to obtain, they can also be expensive. Make sure that you understand the terms of any loan before accepting it.

Was the guide helpful? Check out these extra resources to delve deeper: