There aren’t many mainstream loan options available to low income earners as many lenders classify this type of borrower as a higher risk. Most options aimed at the lower income groups range from $100 to $3000, and come in the form of payday loans, microloans, short-term loans, cash loans, etc.
If you are in need of an emergency loan, these options can be helpful but may have high interest rates and fees attached to them. There are also other non-profit and community based options available which may be more suitable.
Borrowers who are in need of quick cash for an emergency may be tempted to agree to less than favorable terms due to desperation. This can and often will lead to bigger financial problems down the road. Be fully informed before agreeing to any contract and make sure the terms and loan works for you.
Quick view – See loan and benefit options for specific circumstances here.
Below are multiple loan and money assistance programs for Emergencies
Specialist Lender: If you are in a situation where you need money fast, a specialist lender may be a good option. They provide loans from $1000 to $5000 and generally have flexible approval criteria, even helping those with bad credit – Learn more and apply here.
No Interest Loans Scheme (NILS) – This is a program that was initiated by the Good Shepherd Sisters of Victoria in the early eighties and is an Australia wide service for low income earners. They provide as the name suggest “no interest loans” for important must have household goods, vehicle repairs, medical expenses and other living necessities. These loans can be repaid over a 12-18 month period and are generally between the amounts of $800 -$1200.
StepUp – This is another initiative that was developed by the Good Shepherd and is similar to the NILS program. StepUp has a higher funding amount going up to $3000 and carries with it a low fixed interest rate of 3.99%.
FairLoans.org.au – This is a non-profit partnership that was originally setup to help Indigenous Australians access financial services, especially in rural areas. They have since grown into a provider of small low interest personal loans for Australian citizens and permanent residence above the age of 21 with a household income below $50,000. If you have 1 or more dependants your income can be $60,000. Loan amounts are between $1000 and $3000.
Micro Loans – As mentioned in the opening paragraph, there are many different names for these short-term cash loans. As with most things there are pros and cons and being fully informed is the best way to make smart decisions. Be sure you are aware of the terms and all fees and costs associated with micro loans.
Debt Consolidation – If you have multiple high interest loans or credit cards and can’t keep up with the repayments, a debt consolidation loan may be a great option. Consolidating all your high interest loans into one lower interest rate can reduce the amount of overall interest you have to pay and possibly reduce your monthly repayments by a large percentage.
Personal Savings-There are many consumers that have money available in their savings for emergencies, yet still choose to borrow money from banks, and other companies instead. The whole purpose of saving is so you can handle emergencies as they arise. Take the money out of your account and take care of the emergency quickly. The best part of borrowing from yourself is that you can pay yourself back as quickly or slow as you would like and without interest or fees.
Community Engagement Offices
Community engagement offices are there to help those who are affected with issues such as homelessness, drug abuse, mental illness, domestic violence and are in need of financial assistance. They help those who have personal issues and need daily living assistance such as food, housing, drug treatment, or therapy.
A crisis payment is as the name suggests, financial assistance for those who are in need of immediate financial assistance. circumstances for this payment includes, becoming homeless due to domestic violence, or losing a home in a fire. It is also for those who have just been released from prison and have no finances. Depending on your situation, this payment can be received up to 4 times in a 12 month period. Visit the Human Services website for more detail.