Payday loans or Small Amount Loans are a quick way to get cash, especially for those without a good credit rating. For the vast majority of situations they are absolutely horrendous, and should be avoided.

The lure of getting cash as quickly as an hour after you apply should be considered in the sobering light of the interest rates or charges. Different loans have different conditions. Some promote that they have no charges, but charge an interest rate of up to 48%. Others do not charge interest, but instead charge an account management fee that is equivalent to at least 48%.

Debt consolidation loans are almost as bad. There are many fees and charges that are imposed, with little opportunity for your repayments to actually reduce your loan. Debt consolidation companies have been known to sign people into an act of bankruptcy, which can have profound effects on your financial health for many years.

There are better alternatives. Your energy provider (electricity and gas) is part of the Energy Accounts Payment Assistance (EAPA) scheme which gives $50 vouchers to people in need. You could also ask your telephone and internet companies if they have a similar voucher scheme, or if they can put you on a payment plan. You might be able to get a bursary or an interest free loan through the University’s Financial Assistance Unit. If you are on a Centrelink payment you might be able to get an advance payment.

There may also be ways to spend less money each week. For example, there are many services around the University that provides cheap or free food, medical services, and other similar types of services. The SRC has a  SRC Guide to Living on Little Money that has lots of helpful cost-saving tips, or make an appointment to talk to an SRC caseworker by calling 9660 5222.