How the internet is transforming the payday loans space

Australia has some of the most rigorous laws and regulations in place governing the availability of short term, fee only cash loans known as payday loans. Payday loans operate outside of the mainstream banking system and provide quick and ready to access to relatively small amounts of credit to those who either don’t have the time to wait for a mainstream loan approval or don’t have the credit rating required. By international standards, Australia’s payday lending sector leads the world with respect to protections for consumers.

According to Elizabeth Barry of, access to consumer credit is considered an important measure of fairness and one of three key measures of financial inclusion – the other two being basic banking products and insurance coverage.

Since Australia’s first payday lender opened shop in 1998, the industry has evolved considerably. In particular, the role of the internet has seen the sector provide increasing choice and opportunity for consumers using payday lending services.

Ease of comparison

One of the most important roles the internet has played is in providing ease of comparison so that consumers can identify the product and the provider which is most likely to satisfy their specific circumstances. While access to credit is an important consideration in Australia, so is access to choice and information with which inform consumer decision making.

More than just trawling through the online providers, product comparison sites provide an easy way for consumers to gain access to third party assessment of the benefits of different payday lending products and often allow for users to enter the details about their situation which can help them refine the list of suitable choices.

Working out the cost

The internet also provides readily accessible ways to calculate the true cost of loans – the proliferation of online calculators and assessment tools is an important way that consumers can better inform their decisions.

Quick applications and credit provision

The advancement of technology now makes the process of applying for payday credit quick and effective. Once they have chosen the most appropriate product, borrowers can readily apply online and have access to funds on the same day, with a product suited to their particular circumstances and without having to go to the inconvenience of physically attending a loan office – assuming they meet the qualification requirements.

The internet has undoubtedly transformed the payday loans space and will continue to drive its evolution. Nevertheless, it is important that borrowers determine for themselves whether or not a payday loan is suited to them and whether they can afford the repayments, in the same way they would approach any other form of credit.

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