Payday loans seem like a great idea if you’re short on funds. But payday loans can be an expensive type of short-term loan to fund your purchases.

According to the Consumer Federation of America¹, the average payday loan costs 400 percent in interest for a two-week loan. You could rack up charges ranging anywhere from 390 to 780 percent APR. And that’s a significant amount of interest for a very brief loan.

Fortunately, payday loans aren’t your only option if you need cash now. There are alternatives – and many Australians don’t even know they exist. Here are just a few of those options, all of which may be a better option for your finances than a payday loan.

StepUP Loans

What It Is: StepUP loans are offered for Australians on limited or low incomes. It’s a low-interest loan managed by Good Shepherd Microfinance. You can take out a StepUP loan for any amount between $800 and $3,000.

APR: Fixed rate of 5.99% p.a.²

Loan Perks

  • No monthly fees
  • Interest rate is fixed for the length of the loan
  • Maximum borrowing period is 3 years
  • Can be used for car purchases, medical expenses, vocational education, computers, and furniture

How to Qualify: In order to apply for a StepUP loan, you’ll need to contact Good Shepherd Microfinance. On your application, you’ll need to prove your annual income, have a healthcare card or receive Family Tax Benefit A, and have lived in your current home for over three months.

No Interest Loan Scheme

What It Is: Offered by Good Shepherd Microfinance, a No Interest Loan Scheme offers small loans for anyone on low or limited income. The biggest perk of a No Interest Loan Scheme is that it comes with absolutely no interest, which saves you money in the long run. You can take out a loan for any amount between $300 and $1,200³.

APR: 0% (No interest is charged)

Loan Perks

  • Loan terms range from 12 to 18 months
  • No monthly fees
  • Loans offered by more than 250 community organisations throughout Australia
  • Can be used for vocational training, whitegoods, or medical expenses

How to Qualify: You can secure a No Interest Loan Scheme from one of the many community organisations offering these loans across the country. During the application process, you won’t have to undergo a credit check, but you do have to meet qualifying requirements. Those include having a healthcare or pension card, earning less than $45,000 p.a., living at your current residence for at least three months, and proven capacity to repay the loan.

Fairloans Personal Loans

What It Is: Fairloans is a small lending company that offers personal loans. Each Fairloans loan is meant to be transparent and low-cost for borrowers. Every loan is quoted in dollar rates, not interest rates or percentages, so you can estimate your total cost even before you borrow cash. You can borrow either $1,000, $2,000, $3,000, or $4,000 with Fairloans.

APR: The interest costs of each Fairloans personal loan are as follows⁴:

  • $199.50 for $1,000 loans
  • $299.25 for $2,000 loans
  • $598.00 for $3,000 loans (includes an annual fee)
  • $798.00 for $4,000 loans (includes an annual fee)

Loan Perks

  • Loans can be repaid early at no penalty
  • Fees are reduced if your loan is repaid early
  • Establishment fees are only $2.20
  • Can be used for any “worthwhile” personal purposes

How to Qualify: To get a Fairloans personal loan, you’ll need to apply online and submit documentation. All borrowers are required to be Australian citizens or residents, be at least 21 years old, have an annual income of less than $80,000 p.a., and have fewer than two credit defaults.

Choose These Alternatives to Payday Loans

Australians, you don’t have to pay the price of potential high-interest payday loans. You can avoid these more expensive, more costly loans altogether, if you know there are other alternatives.

With other loan options like those mentioned here, you don’t have to panic when cash is tight. If you’re in need of an influx of money, you can choose one of these less expensive loans. Though they aren’t cheap, they can be a much better choice than payday loans. These alternatives may have lower interest, better financing terms, or longer repayment options.

Before you decide to take out a loan, you should search for other options like the loans above. You can compare interest rates and fees, consider loan terms, and find a loan that suits your finances and needs. All it takes is a little research, right from your computer.