To be frank, the Australian industry of quick loans is far from being the popular and well thought of – quite the opposite, might we add. There are numerous myths and misconceptions due to some lenders that employed unethical lending practices. As a result, a range of untruthful perceptions has emerged. Still, you should know which they are, to know both sides of the story.

  1. Quick Loans Are Schemes That Rip You Off

To start with, due to the bad publicity quick loans have received in recent years, most people have come to believe that these loan products are ripping off schemes. Still, this is far from the truth.

Quick loans are created specifically for people that are in urgent need of cash but cannot get it from somewhere else. Therefore, as long as you meet the loan repayment terms, everything is fine. Things are likely to get off track when you miss making repayments or you default – which applies to all types of loans.

  1. Quick Loans Are Beneficial to Lenders Only

Moving on, another common misconception is that providers of quick loans want to rip off their customers. However, considering that the lending criteria for these loans are really permissive, it makes sense for the interest rates to be as high as they are – especially since these loans usually don’t imply a credit rating check.

People with poor credit rating can seriously find these financing options life-changing. The only requirement you should meet is to have a steady income so that you can repay the loan in time. Also, since this type of loan doesn’t require collateral, the additional costs are greater than in the case of other types of financing.

  1. Quick Loans Have Concealed Fees and Additional Costs

Our list of popular myths regarding short-term loans continues. Many people are under the impression that payday loans come accompanied by hidden costs and fees the lender hesitates to disclose. The reason behind this assumption is that the majority of borrowers aren’t responsible enough to go through all the terms and conditions included in the signing papers.

It is against the law to conceal fees and additional costs – that is to say, all lenders based in Australia must be 100 percent transparent and upfront concerning the terms and conditions of the loan. Therefore, in order to avoid such scenarios, borrowers should take the time to scrutinise all the information about the loan product.

  1. Quick Loans Are Targeted for People with Serious Financial Problems

Furthermore, there is a common misconception according to which short-term loans are provided for poor people with unstable financial situations. Nevertheless, once again, this isn’t accurate. As we already outlined beforehand, quick loans are targeted for people that are in need of cash ASAP – that’s why they are referred to as emergency loans, as well.

Additionally, all types of people deal with financial difficulty. Therefore, it would be wrong to assume that whoever gets a quick loan is part of a specific segment of the population. As a matter of fact, when you need money for an emergency, it simply means that you’re going through something and there’s no other way in which you can get the money you need.

  1. Payday Lenders Use Threatening Strategies to Collect Payments

While it’s true, to some extent, that some payday lenders use aggressive marketing techniques to promote their loan products, this doesn’t mean that they use threats to collect the payments.

Truthfully, reputable lenders, such as Australian Lending Centre are transparent and upfront regarding the terms of the financing. At the same time, reliable lenders never use these tactics. This merely means that you should do your research before picking out a lender out of the sea of lenders.

  1. Taking Out Quick Loans Means That You’re Irresponsible

Moreover, there is a common misconception according to which if you’re considering taking out a quick loan, this means that you’re an irresponsible individual. Nevertheless, as long as you consider both the pros and cons of this financial decision, this doesn’t apply. It is implied that each financial decision has a range of pros and cons. It makes total sense for quick loans to have both pros and cons.

Evidently, the pros are that you get quick access to cash when you need it, without having to worry about the application process or adding collateral or a co-signer. When you need cash ASAP you don’t have time for these.

On the other side, the cons are that the interest rates are high and that, if you default on the loan, you might end up in financial trouble. Still, this applies for all types of financing – meaning that, regardless of the loan product you want to apply for, you should be 100 percent sure that your financial situation allows you to cope with making repayments.