Payday Loans Pitfalls And Nifty Loans

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When you think payday loans do you see shots fired and holsters waving like we’re in a western movie? Well, you’re not alone. Payday loans are at the heart of Australia’s alternative lending market. However, there are several payday loans pitfalls that disrupt the integrity of the market. Traditionally, they have been a grey area, but recent regulation has transferred the market and produced healthy alternatives to payday loans.

Before we dive into all this, let’s look at what payday loans are.

Firstly, what are payday loans?

A payday loan traditionally refers to a high-interest short-term loan. The payday loan term will typically be over the persons next couple of “pay days” (hence the name). The conditions of a payday loan generally include making repayments every paycheck during this time. Some lenders will organise a direct deduction from your pay. The longer your loan term, the more you pay in interest.

The objective of payday loans is to help those who need an extra bit of cash to see you through to the end of the month. Payday loans may seem like a saving grace, however, they can leave us with high debt and high repayments, as they are over such a short term. The last thing you want when you’re in a pickle financially is a bad loan that could put you at risk of ruining your credit score.

There are payday loans pitfalls that can leave you wondering whether there is another option for paying off pesky bills or unexpected medical bills. So, let’s look at payday loans. What are some payday loans pitfalls and what are healthier alternatives to payday loans?

So, how do payday loans work?

Typically, the goal of a payday loan is to boost your cash flow until your next payday arrives. You hand over a blank cheque and a copy of your driver’s licence and you can be approved for a payday loan, no credit checks – nothing! That may sound like a dream, but there is a chance the borrower could dig themselves into debt they may battle to escape from.

Picture this – you write a postdated cheque for the amount of your loan, plus additional fees and charges, and once you receive your next paycheck, the lender will cash your check. You may extend the loan, resulting in a cycle of debt that can be difficult to recover from.

There are buckets of payday loans pitfalls to avoid.

Payday Loans Pitfalls

Payday loans pitfalls: Lack of responsible lending practices

Perhaps the most dangerous of the payday loans pitfalls are the accusations of irresponsible lending practices that the payday loans industry has been plagued with for preying on vulnerable individuals. Their services are typically targeted towards poorer communities, with fewer means to repay the payday loan.

Payday loans pitfalls: Must repay the loan as soon as possible

If you are able to repay your payday loan on time then you won’t incur large fees, however, failure to repay your loan could incur additional costs and fees that could lead to a spiral of financial hardship. This risk is often increased with shorter loan terms, as the weekly or fortnightly payments are much higher over shorter periods.

Payday loans pitfalls: Potential effect on mental health

With the pressure of repaying your loan over a rather short period of time and the temptation to extend your loan if you cannot repay it, payday loans could have a negative effect on your mental health is the large repayments are causing you stress.

Payday loans pitfalls: Chance of falling into unmanageable debt

With the readily available option of taking out a loan each pay cycle after your previous one is paid, many who take out payday loans fall into debt spirals.

How Google protects customers from payday lenders

With the rise of payday lenders, the internet has become a playground for the industry. With Facebook and Google ads, finding a payday lender is too easy. In May 2016, Google addressed this problem by imposing a ban on all payday loan advertisements. In addition, the ban includes any borrower that requires customers to repay their loan in 60 days or less. It also requires all lenders to display a disclaimer on their site stating their loan terms and whether they work with third parties.

ASIC also requires lenders to conduct thorough, reasonable inquiries into applicants financial situation. Furthermore, with the increase of regulation surrounding payday lenders, we have seen healthier alternatives for pay loans pop up!

So, it seems payday loans are a definite no-go! You may be thinking what other options are open to you when pesky financial problems arise. Well, don’t fret just yet, there are healthy alternatives to a payday loan.

Potential alternatives to a payday loan

  1. Charge the amount to your credit card
  2. Ask a family member or friend for a loan
  3. Discuss payment plans with your current creditors or seek out a financial counsellor service
  4. Apply for a traditional small personal loan with a longer repayment period (that’s where Nifty Loans comes in!)

What are Nifty personal loans?

Nifty Loans offer personal loans for those who need a financial pick-me-up. We access applications quickly and efficiently, keeping in mind that every situation is unique. To help avoid our customers running into financial hardship and reduce the chances of payday loan pitfalls, we don’t offer loans with a repayment period under 3 months and prefer our loans to go over a longer period. Nifty is dedicated to responsible lending practices, so we will never approve a customer that cannot meet their proposed loan repayments.

Why apply for a personal loan?

There is a myriad of reasons why applying for a personal loan may help your situation. Much like borrowing money off your credit card whilst you’re short of funds, a personal loan can act as a helping hand in pesky financials muddles.

Reasons to apply for a personal loan:

How does Nifty loans differ?

Nifty is a small personal loans company. We are a far cry from the neon signs you see advertising payday loans. Our business is 100% online. We have a dedicated customer service team that is ready to answer any questions regarding your finances.

Let’s take a closer look at how Nifty loans differs from traditional payday lenders:

Nifty adheres to responsible lending

  • We use data to verify your income and expenses

    Some payday lenders allow their consumer to enter their income and spending habits manually, cultivating a system where desperate borrowers lie to get approved for a loan. To avoid these payday loans pitfalls, Nifty utilises the latest in safe banking technology to access a read-only view of your bank statements and spending habits.  From this, we can use confirmed and verified information. The safety of your information is of utmost importance to us, so no need to fear, we will safeguard your privacy.

  • We offer Financial hardship

    When our customers are suffering from financial hardship we can set up a  repayment plan or hardship agreement to help them get back on track.

  • We do perform credit checks

    When we access a personal loan application, we do conduct credit checks. However, they are only one piece of our master approval plan. To give the right help to clients who need it and can afford to repay their loan principal.

  • We have minimum requirements before you can apply for a personal loan

    Nifty wants to provide small loans to people who require financial assistance, however, can also afford repayments. We do not lend to clients who have proven they cannot pay back the loan principal. To avoid clients who we cannot approve applying for our personal loans, we have devised four basic minimum requirements for our loan application:

    1. You must be at least 18 years old
    2. Must an Australian citizen or permanent resident
    3. You’ve been receiving a regular income into a personal bank account for at least 3 months.
    4. Have an active phone number or email address

    In addition, simply because an applicant may meet these requirements doesn’t secure an approval. Furthermore, we do perform credit checks and apply a diligent approach to our responsible lending practices.

  • choose your preferred repayment plan

    When you apply for a loan through Nifty Personal Loans, you can select your preferred payment term. We encourage all your applicants to choose a plan that realistically works with other financial commitments they have. Our friendly customer service is ready to help any applicant with questions they have regarding their loan application and the terms we offer.

Flexible loan terms

Nifty loans offer flexible loan terms for all applicants. Customers are not restricted to a 16-day loan term. Our minimum loan term is 3 months with a maximum of 24 months.

Supportive customer service team

Nifty loans have a friendly and dedicated customer service team. Whether you need to have a chat with a human or simply want your questions answered, Nifty’s customer service is here to assist.

Furthermore, providing financial services that are helpful and contribute to someone’s livelihood should be the main purpose. These financial services should avoid the payday loans pitfalls mentioned before. Services that are transparent about costs, and are available to discuss any questions or inquiries you may have.

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Who can apply?


You're at least 18 years old


You're an Australian Citizen or Permanent Resident.

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You've been receiving a regular income into a personal bank account for at least 3 months.

Email address @

You have an active mobile number and email address.

How it works

Small Loans

$300 - $2,000

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Loan amounts:$300 - $2,000
Terms:3 - 6 months
Establishment fee:20%
Monthly Fee:4%
*Max Comparison Rate:199.43%

Small Loan Example

Loan amount:$1,000
Terms:12 Months,
(50 weekly repayments)
Establishment fee:$200
Total other fees:$240
Total payable:$1,440
Weekly installments:$33.60

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Medium Loan Example

Loan amount:$3,000
Terms:18 Months,
(78 weekly repayments)
Establishment fee:$400
Total other fees:$1,379.06 (reducing interest)
Total payable:$4,779.06
Weekly installments:$61.27

Large Loans


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Loan amount:$5,000
Terms:13 - 24 months
*Max Comparison Rate:48%

Large Loan Example

Loan amount:$5,000
Term:18 months,
(78 weekly repayments)
Establishment fee:$400
Total Interest:$2,027.80
Total payable:$7,027.80
Weekly installments:$90.10
*WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate with the lender that finances your loan. Different loans may include other payable fees and charges. All fees and charges will always be displayed on your loan contract.

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Who we've helped

Payday Loans Pitfalls And Nifty Loans Overall rating: 4.8 out of 5 based on 46 reviews.
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"Nifty loans are so quick at making your borrowings go into your account 5/5 I would recommend this to everyone who needs a small loan easy repayments they respond so quickly I received it in a day of applying"

- Grouse


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Payday Loans Pitfalls And Nifty Loans Overall rating: 4.6 out of 5 based on 232 reviews.

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