It’s an easy fix for many Australians who struggle to repay loans, and it’s the fastest-growing loan category in Australia.
But it’s also facing significant pressure, with more than 40 per cent of Australian households unable to pay their loans and the government warning that more than half of Australian families will have to pay more than $100,000 in interest on their loans in the next 12 months.
Here are some of the main points about the cash loan, commercial loan and payday loan crises.
Cash and commercial loans are all different – and the banks don’t give you the right information How to find out if you have access to a cash or commercial loan, and if you should apply for one.
If you’re an independent contractor, you don’t get the right terms and conditions.
Loans from commercial lenders often have higher interest rates than loans from banks.
What you can do if you’re unsure if you can pay off your loan.
It’s easier to make a cash loan if you know the lender’s terms and interest rates.
What’s a cash payment?
What’s the difference between a payday loan and a cash one?
What do you need for a payday?
Read more: The Consumer Financial Protection Bureau has called on the banks to set out how they’re going to treat all borrowers who apply for cash and commercial loan loans, in particular those who are independent contractors, and how they plan to treat those who apply as a dependent on a payment plan.
The bureau also says it will investigate all complaints about payday loans from consumers who can’t afford to repay their loans.
Consumer watchdog says cash and payday loans ‘a real risk’ to Australia’s economy It’s not just the banks’ fault.
The banks themselves are also under fire for failing to offer the right advice to their customers, and for failing or failing to provide information to the consumer about their cash and consumer loan options.
They’ve been accused of being lax in their information, with the Consumer Financial Ombudsman (CFO) telling the ABC it had received almost 300 complaints about their information and advice since January 2017.
The CFO has also flagged a number of consumer complaints about the way the banks offer cash and cash-like loans, which is a real risk to Australia, because it means many people are unable to repay.
The CFO says that as many as half of people who apply with a cash payday loan may never be able to repay it.
One consumer who had a payday lender make a $400,000 loan with a 3.5 per cent interest rate, said she would have to work 40 hours a week for five years to pay it off.
She says she had to cut her hours and quit her job to take out a loan and she says the bank didn’t inform her of the interest rate.
“I couldn’t pay the interest because I couldn’t get on and off of the phone, because they wouldn’t tell me,” she said.
“I didn’t know if it was going to get me any more money.”
The payday loan industry says it provides high-quality services and provides the right incentives for people to repay the loan.
Consumer groups are calling for the banks and other lenders to take a more proactive approach, and to provide the consumer with more information about their loan options and terms.