Moola Payday Loans Review

We reveal the true cost of a Moola payday loan, including interest rates, fees, penalties, terms and conditions and what to watch out for

Updated 6 December 2021

Getting a payday loan is not a decision to make in a rush - there are significant costs involved, and you may find yourself in a worse-off position later on. We've published this review to examine and explain the important fees, terms and conditions with any Moola payday loan.

Our review covers:

Know This First - Moola and Payday Loans

The more regular repayments you can make, the cheaper your loan will be. Moola asks upfront how regularly you are paid, and offers repayments around your payday. The more repayments you make, the less interest you'll pay. Moola charges repayment fees on top of the interest costs.
For example, making four payments of $200 each week is going to decrease your outstanding loan (and therefore incur much less interest costs) than making a payment of $800 at the end of the month.
Moola doesn't charge penalty interest rates for late payments, but it does charge a late payment fee.
The 'Total repayment cost' is the original loan amount, interest costs and fees applied.
If you decide to make an early repayment, Moola doesn't charge any fees to do this. Doing so will save significant interest costs.
Interest rates vary hugely among payday lenders, and we recommend shopping around for a Payday loan. Our payday loans guide has more details.

Important must-know facts:

Form filling: Moola states "Our online loan application is quick and clear, apply online in 5 minutes". We believe a considered application, which needs to be reviewed, signed and submitted, would take an average person at least around 15 to 20 minutes. When reviewing Moola, our research term made an application which took 18 minutes.
Wages Deducation: While Moola loans don't need security, you sign a Wage Deduction Authority as part of your application. This means if you default, Moola will seek to take money directly out of your wages. With high interest rates, this could leave you in a bad financial position.
Right to cancel: You are entitled to cancel your contract with Moola within 7 working days of the loan agreement being signed. You'll need to repay the loan amount borrowed in full, and per the agreement, Moola has the right to charge you for interest for the period from the day you received the loan until the day you repay.

Moola Borrowing, Repayments and Fees

The decision to take our a payday loan should not be rushed. In this section we outline the fees, fine print and everything you need to know about what a loan will really cost.

How much can I borrow with Moola?

Moola offers three types of loan, but for payday lending, the 'Small' loans. For first time borrowers, the limit is $1,000. The interest rates for first-time Moola borrowers are higher than those presented in our least-worst payday loans summary.

Know this: How much you earn and how regularly you are paid will depend on how much you can borrow. There is single type of loan available:

Loan type: Small

Purpose: Short-term loans for urgent cash needs (fixing a car or paying an essential household bill)
Loan amount: $500 to $1,500
Interest rate: 0.8% per day, 24% per month or 292% per year. Interest is charged on the unpaid balance at the end of the day
Minimum loan term: 89 days
Maximum loan term: 192 days (around 27 weeks)

Loan type: Medium

Purpose: Medium-term loans for small business owners and home renovations
Loan amount: $2000 to $5000
Interest rate: 0.48% per day, 11.52% per month or 175.2% per year. Interest is charged on the unpaid balance at the end of the day
Minimum loan term: 210 days
Maximum loan term: 303 days (around 43 weeks)

How fast does Moola put money into my account?

As stated on their website, loans approved in standard business hours should appear in your bank account within four hours. Moola states that it is unable to pay out loans after 7pm or over the weekend, so if a loan is approved after then, money will be processed the next morning, or Monday morning if it is after 7pm on Friday.

What fees does Moola charge in addition to the interest rate on its payday loans?

Despite Moola saying "no hidden fees" in its marketing, there are a lot of charges you need to know about. Firstly, there is a one off 'establishment' fee once your loan is approved. Then there are fees charged every time you make a repayment using bank transfer, debit card or direct debit. There are also default fees and other penalties. We detail all the fees below:

Standard fees:

Loan establishment - None: Free processing, assessment and approval of finance application
Loan repayment fees - $0.62 (bank transfer), $0 (direct debit), or $0 (debit card payment): These are charged every time you make a repayment.

Default and late-payment related fees:

Loan default - $20.08 per default: If you miss a loan repayment by being overdrawn, this default fee will be added to your loan balance. Moola states that if you contact their accounts team and make payment within 36 hours, no loan default fee will be charged.
Wage Deduction Authority (WDA) - $29.78: This is a one-off fee that is charged if you need to repay Moola through your employer. This happens when you default more than once and/or are unable to come to a repayment agreement with Moola.
Veda fee - $20: If you default, Moola will lodge a default on your credit record and charged you a fee for doing so.
Loan extension - $11.12: If you extend your loan beyond the agreed term, you'll pay a fee (as well as additional interest costs until the loan is repaid in full)

Other fees:

Cancelling a direct debit - $20: This is charged if you cancel a direct debit and then need to re-instate it. For example, if you change your payment preferences and decide to go back to direct debit.

What are the repayment terms?

Moola asks for your payday frequency upfront, so if you're paid weekly, you will need to repay a portion of your loan weekly.

Early repayments are permitted free of charge. As Moola charges interest based on the outstanding loan balance, the sooner you make an early repayment, the less you'll pay on interest costs.

Moola Applications and Alternatives to Payday Loans

If you are convinced a payday loan is right for you, this section explains what Moola is looking for in an application.

How do I apply for a payday loan?

Moola makes it clear:

You must be over 18.
You must be a New Zealand citizen, resident or hold a current working VISA.
You need to receive ongoing income (Moola doesn't lend to beneficiaries)
You need an active bank account that your pay gets credited into on regular paydays.
You need access to a device with internet connection, and active email account, cell phone.
You must pass Moola's employer checks.
You cannot be bankrupt
You must have sufficient credit history to produce a credit score - for more information, visit our credit scores page and see your credit history for free. Moola, like most payday lenders, will not lend to anyone who has loans in collection, or who has a recent history of defaulting on loans.

You'll need to supply:

Your address
Your employment details (employer, how long you've worked there, your pay after tax, your next pay date and how frequently you are paid)
Your household income
The number of dependants you have
How much you spend each week/fortnight/month on

Rent or mortgage payments
Groceries
Transport/petrol
Existing finance payments
Utility bills (i.e. power and water)
Insurances
Childcare

What does Moola look at in a payday loan application?

Moola looks at a number of factors when assessing whether to approve a payday loan. This includes:

Whether you spend less than you earn and have increasing bank account balances.
Whether you have enough cash surplus to cover your normal expenses (mortgage/rent/board, food, utility bills, medical expenses and transport), after making debt repayments.
Whether you currently owe large amounts of debt (e.g. credit cards, personal loans or other short-term loans).
Your history of making payments on time and whether or not you have recently been charged late, overdraft, or insufficient-funds related fees.

Are there alternatives to Moola, and payday loans in general?

Yes - we've listed six possible alternatives to payday loans below. For more information, alternatives and tips, visit our payday loans guide.

Six Alternatives to a Moola Payday Loan

Before rushing in to apply with Moola, there are plenty of alternatives. We list our top six below that could save you from getting a payday loan.

Keep your credit cards 'healthy' and consider a cash withdrawal

Before contacting Moola, look at your current credit card situation.
Find out what your limit is and if cash is tight, budget for the minimum payment (often around 3% to 5% of the balance owed).
Keeping up to date is always better than an outright default.
You can then consider making a cash withdrawal to solve your cash crunch. The interest rate and fees with a credit card cash withdrawal are much cheaper than any Moola payday loan.

Ask about raising your credit card limit

While taking on more debt is never good, credit card debt is always cheaper than a Moola payday loan.
To find out where you stand, call your bank and ask them - small increases are often accepted via internet banking.

Consider a balance transfer credit card before Moola

Paying interest on debt is expensive. Balance transfer credit card applications are usually assessed within 1-2 working days, so if approved, you can save money right away.
Many banks offer 0% interest rates for up to 12 months - you won't be able to apply with the bank you're already with, but many major banks offer deals to help crunch interest costs.

You may be eligible for a Personal loan

Personal loan interest rates are always lower than those offered by Moola, and you have more flexibility with the repayments.
Personal loans usually take some time to be assessed and approved, so they're not for urgent money problems, but they are a lot cheaper.
It all comes down to affordability - if you want to borrow $1,000 and have the means to pay back $100 every payday, explaining this to a lender to help your chances of being approved.

Consider borrowing from family, not friends

Friends and money don't mix - borrowing within families is surprisingly common. The best idea is to start with siblings, then cousins, then parents.
If a family member is willing to help you, make sure you prioritise paying them back. If you don't, you'll burn your relationship, and word will spread. Just be upfront, make repayments and gain respect.

Consider increasing your bank account overdraft and/or changing bank account to one that offers a better deal

Our overdraft fees page sets out what banks charge for providing an overdraft.
The fees can be high, but again it’s cheaper overall and less aggressive than Moola's Payday loans.