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What Are Short-Term Loans?

A short-term loan is a type of loan that allows you to borrow a small amount of money with little to no collateral. As its name implies, it is repaid in a short period of time, usually within a year or less, sometimes even within a few weeks.

In addition to the short repayment time, the amount of money you can borrow with a short-term loan is smaller than with a long-term loan. Therefore, short-term loans are suitable for borrowers who need quick access to smaller amounts of cash.

Benefits of Applying for Short-Term Loans

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    Less Total Interest

    With a short-term loan, there is less time for interest to accumulate. So, even though the interest rate is actually higher than a long-term loan, you pay less total interest.

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    Less Strict Requirements

    Since the amount of a short-term loan is usually smaller than a long-term loan, the requirements for such a loan are generally easier to meet.

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    Faster Release of Stress

    With a short repayment time, you can quickly rid yourself of the burden and stress caused by long-term loans and avoid the psychological damage caused by long-term debt.

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    Quicker Funding Speed

    Most short-term lenders deposit cash into borrowers' bank accounts in as little as 24 hours, which can be helpful if you have an emergency or unexpected expense.

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How to Qualify for Short-Term Loans in Australia?

Before you apply for a short-term loan in Australia, check out if you meet the following criteria.

  • The applicant must be over the age of 18.
  • The applicant must be an Australian citizen or permanent resident with proof of identity.
  • The applicant must have a valid email address and phone number.
  • The applicant must have had regular income deposited into the bank account within the last 90 days.

Short-Term Loans in Just 3 Simple Steps

Applying for a short-term loan is quick and easy with the help ofWeLoans. Simply follow these 3 steps.

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    Submit Your Info

    Complete a simple application form with your desired loan amount and some personal details. This form will be automatically sent to our partner lenders.

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    Compare Your Offers

    Offers from different lenders will be delivered to you within a few hours. Compare the loan terms, interest rates and fees carefully. Choose the one (if any) that best suits you.

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    Receive Your Money

    Once you sign the loan agreement, the lender will transfer your cash to your bank account as soon as possible. Depending on your bank, the funds may arrive within 1-2 business days.

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What Will a Short-Term Loan Cost You?

In Australia, lenders are regulated by the Australian Securities & Investments Commission (ASIC) and there are limits to the amount they can charge you for a loan.

For short-term loans of $2,000 or less, lenders can't charge you interest. Rather, they can only charge you:

  • A monthly account-keeping fee (which cannot exceed 4% of the loan amount);
  • An establishment fee (which cannot exceed 20% of the loan amount);
  • A government fee or charge (if any);
  • Default fees or charges (if you miss or fail to make a payment); and
  • Enforcement expenses (if you default on the loan).

Here at WeLoans, we provide different offers from our partner lenders. You can shop around and choose the one with the most reasonable fees.

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Can Bad Credit Borrowers Apply for Short-Term Loans with WeLoans?

Yes, it is possible to get a short-term loan even if you have bad credit. Many of our partner lenders specialise in providing short-term loans to borrowers with bad credit.

These lenders do not require you to have a good credit score but do require a steady source of income to demonstrate your ability to repay the loan on time.

FAQs

  • What Can a Short-Term Loan Be Used for?

    You can take out a short-term loan for almost anything, including emergency expenses and debt consolidation. Even entertainment events like vacations and weddings can be financed with a short-term loan.

  • Will Getting Short-Term Loans Hurt My Credit?

    Getting a short-term loan can both hurt and help your credit standing. When you apply for a short-term loan, your credit score may drop slightly. However, making payments on time will push your score higher and can help rebuild your credit rating.

  • How Fast Can I Receive My Funds?

    The transfer time varies depending on the lender and the bank. After signing the loan agreement, you can expect the funds to arrive in your bank account within 1-2 business days.

  • Does WeLoans Offer Short-Term Business Loans?

    No, WeLoans does not provide business loans. Our loans are specifically designed for personal use.

  • Can I Apply for Short-Term Loans If I Am on Centrelink Benefits?

    Yes, some of our lenders consider Centrelink benefits to be a stable source of income and offer short-term loans to Centrelink customers. Learn more about our Centrelink loans.

  • What to Do If I Fail to Repay My Short-Term Loans?

    For some unforeseen reason, you may not be able to repay your loan. In this case, you should contact your lender immediately and explain your situation. The lender may work out a temporary payment plan to help you get back on track.

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Written by
Jonathan JacksonExpert Financial Writer

Updated on: Mar 29, 2023

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