The contents on this page have been provided by Beforepay for informational purposes only and do not constitute financial advice. Beforepay is an Australian fintech providing ethical lending products to consumers, including its flagship wage advance product, Pay On Demand™.
When life happens, so do unexpected expenses, and sometimes that means having to pay for something you don’t immediately have cash for. Sure, you’ve got credit cards and large loans that can help pay for things, but what if they weren’t exactly the best or most cost-effective solution?
In this article we’ll look at how short term money providers like Beforepay, offer a more suitable option for managing your finances and paying for whatever pops up while keeping your debt to a minimum.
Like most Australians, you might have a rainy day fund that you’ve saved up over time to cover unplanned costs, like car repairs, medical bills or school expenses. This is a great way to help you manage your financial wellbeing, so you’ve got a cash boost if and when you need it.
But what if your unexpected expenses end up costing more than what you’ve saved up? Or you don’t necessarily want to dip into your savings. And you don’t really need to take out a large $20,000 or $50,000 loan.
Short term loans provide access to small amounts of money, with shorter payment terms. Traditionally these were things like payday loans, but because their fee structures were so high, new companies like Beforepay came in to flip outdated models on their head!
Beforepay is an ethical short term money provider that puts you in the driver’s seat of your finances. Need money quickly? Sign up and Cash Out between $50 and $2,000 straight into in under 10 minutes (subject to eligibility). Want to know exactly how much you need to pay? Beforepay only charges a 5% fixed fee on the amount you borrow and lets you repay in up to 4 instalments over a period of up to 62 days – no interest, no late fees. Ever.
Disrupting traditional short term loans like payday lenders (and their excessive and confusing fees), Beforepay offers affordability, convenience and transparency, so you can take care of your unexpected expenses with total peace of mind. Because the last thing you want is more surprises!
To compare, payday loans can charge an establishment fee that is 20%* of your loan amount and an additional fee that is 4%* of your balance every month, until your loan is paid in full. Late fees and default charges may also apply if you’re unable to pay your loan in full within the terms of your loan contract.
Let’s look at an example to break this down even further.
Financial products work in different ways, with different features like fee structures and time periods for payments, so it’s hard to exactly compare “apples to apples”.
For the purpose of this example, the calculations assume usage/repayment over 12 months and are based on a $2,000 payday loan on a fortnightly repayment plan over a year, assuming you don't miss a repayment, compared to $2,000 borrowed over a year with Beforepay. Note that Beforepay advances are for a duration of 62 days only.
The payday loan fees used in this example are based on the common fees charged by payday lenders*, and the below calculations are based on maximum fees, however note this is not representative of every product offering on the market.
Based on 10 Cash Outs of $200 each across 12 months.
20% of loan amount*
Estimated total monthly fees
*4% of outstanding balance every month*
Estimated fortnightly repayments
Estimated amount for each of 26 total payments across 12 months
Total estimated cost in fees and other charges over 12 months
Disclaimer: This comparison is a model, not a prediction. These figures have been included for general information only without considering your personal circumstances. Results are estimates; the actual amounts may be higher or lower. Beforepay eligibility criteria and terms and conditions apply.
Short term money services like Beforepay offer an easy and affordable solution to help you pay for unexpected expenses if you don’t need a large loan.
Here are some things you can consider when doing your research to help you decide on what option is suitable for you.
Unexpected expenses can be a real challenge, especially when you don't have the cash on hand to cover them. While a large loan may be the first solution that comes to mind, it's not the only option, and you can consider short term money providers like Beforepay.
When choosing an option to help you cover an unexpected expense, remember to consider your personal and financial circumstances and it’s important to review the full terms and conditions of the products you are considering.
Beforepay is an ethical, customer-friendly app that helps people access up to $2000 (subject to eligibility) for a fixed 5% fee to help people manage temporary cash flow challenges.
Designed to help working Australians take control of their finances, Beforepay also empowers customers with unique spending insights and a bespoke budgeting tool to make money management easy and stress-free.
New customers and approved Cash Out limit subject to assessment and eligibility criteria. Eligibility requirements include a regular pay cycle (weekly, fortnightly, monthly) deposited into a support bank account linked to your Beforepay account, with a weekly income of more than $300 a week after tax. Centrelink payments cannot make up more than 50% of this amount. View more details here. Terms and conditions apply.
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