What was unthinkable twenty years ago is commonplace today. Banking over the internet – let alone an internet enabled phone – was viewed with scepticism and concern. Now, internet and smartphone banking is as ubiquitous as texting or scrolling TikTok. In Australia, with the rise of new financial technology (fintech) and streamlined financial reporting and compliance, consumers are now equipped to access finance at the tap of a button. As long as they’re registered with APRA and have an Australian Credit Licence, you’re good to go.
With all that said, what online finance options are there – and what should you absolutely talk to a human about before applying?
Credit cards
If you have a netbanking app installed on your phone, it’s likely you can apply for a credit card. If you’re over 18, have stable income, and are an Australian citizen or permanent resident a bank will issue you with a credit card, with a limit determined by your credit history and current level of income. Some buy now, pay later apps such as Zip Pay offer “virtual credit cards” which allow you to pay for goods and services using credit but have no corresponding physical card; and they are good for single-use transactions, if you’re wary of giving out your real details online.
Personal loans and car loans
Websites and online brokers like Savvy offer personal loans and car loans to Australian consumers without meeting face to face or even talking over the phone. Automated compliance apps and services can check an applicant’s credit, access their banking information, and assess their supporting documentation all over a secure web portal. Better yet, brokers can find different loan products from multiple lenders, helping you find the best deal possible for your situation.
Bad credit loans
If you know you have bad credit and need finance, you can also turn to online brokers. Online brokers can assist with approving loans for customers with bad credit. You may need to borrow money for going to school, a new car, or to consolidate other smaller debts – and paying off a bad credit loan on time and in full is a stepping stone towards restoring your credit. Just remember bad credit loans have higher than normal interest rates due to the lender taking on more risk.
If you have trouble paying your debts or need financial advice, contact the National Debt Helpline.
Payday or small cash loans
Small cash loans – about $100 to $1,000 or so in size – can be used for sudden emergency expenses such as unavoidable car repairs, replacing a broken-down appliance, medical bills, or urgent travel. These are meant to cover the expenses until you can pay off the loan when you’re next paid by your employer – otherwise they can accumulate huge interest and fee charges, sometimes upwards of 40%p.a. Be sure to read all the disclosure statements before applying so you know what you’re in for.
Mortgages – possible, but should you?
Taking out a home loan or mortgage online is entirely possible – but should you? Taking on a mortgage is one of the biggest transactions of one’s lifetime; and speaking to a banker or broker to help guide you through the process is highly encouraged to get the best possible outcome. Though there may be some aspects of the process that are automated or conducted electronically, it’s usually best to talk to a real mortgage broker – even if it is over video chat – so they can explain the process in full.
If you’re ever in doubt about credit, its always wise to consult a financial adviser so you can fully understand your rights and obligations as a borrower.
