Same Day Loans Comparison and Alternatives

Same Day Loans should be a last resort and otherwise be avoided at all costs - our guide highlights alternatives and everything you need to know if you proceed to apply

Updated 2 November 2020

Same Day Loans - A Warning 

1. We take the view that a Same Day loan should only be taken out as a last resort.
2. If you need cash now and you are SURE you can repay the loan, a Same Day loan is one solution.
3. But, if you are uncertain about whether or not you can repay, Same Day lenders will charge you unbearably high late fees and penalties. 
4. An urgent $500 Same Day loan can turn into a $1,000 nightmare.
5. In short, we strongly suggest that you only borrow if there is no other option AND you know you can repay

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Important: Law changes help borrowers but same day loans are expensive for most borrowers
From 1 May 2020, the cost of credit cap came into force. This limits interest and fees charged on a high-cost loan to 100% of the amount borrowed. For example, if an individual borrows $1,000, they will never have to pay the lender back more than $2,000, including all fees, penalties and interest. Additionally, lenders are no longer allowed to charge more than 0.8% per day in interest and fees on high-cost loans.

Same Day Loans Summary

• ​Interest rates start at around 0.5% to 0.8% per day - this sounds low, but it's extremely high given mortgage rates are around 3% to 5% per year.
• Fees and administration costs add up - and some lenders charge a fee for every direct debit payment
• Alternatives to Same Day loans exist, and should be considered  before the trigger is pulled on an application. 
• Same Day loan applications will show up on a credit report, meaning any further lenders will see that you needed fast cash.

Do you still want a Same Day loan?

We are very negative on Same Day loans and believe there are a number of suitable alternatives. Our guide compares the different lenders in the market, highlighting the annual interest rate, fees and three examples of Same Day loans taken by other New Zealanders (and the costs involved in repayment).

Our guide covers:

• How to Pick a Same Day Lender that is Best for Your Needs
• ​Same Day Loan Alternatives
• The Least Worst Same Day Loans
• Must-Know Facts about Same Day Loans
• ​Conclusion

How to Select a Same Day Loan that is Best for Your Needs - Four Must-Know Facts

Find the cheapest price for your Same Day Loan

Interest rates, upfront fees, penalty interest and default fees vary among Same Day lenders. The lowest interest rate charged by one company is close to DOUBLE the interest rate charged by another. Having compared the range of lenders, we believe that, on average, you pay $45 for every $100 borrowed in fees and interest. This makes a $500 loan cost around $725 over a short term.

Know this: Fees are largely consistent across Same Day lenders, so finding the best interest rate will help you save a lot of money during the repayment period.

When comparing, make sure you know:

• The exact date you plan to repay the Same Day loan - the longer the term, the higher the cost. This is because interest keeps getting added to the loan for every day you owe the lender money.
• What is the total dollar amount you will repay if you repay on time. 
  
• The date you expect to make full repayment - this helps you budget the repayments.
• The late repayment fees and late payment interest rate if you cannot pay. This is equally important, as the penalties can be hard to repay once incurred. ​

AVOID Same Day Loan Brokers

There is a strong likelihood that a broker is nothing but a middle-man who will send your details to a Same Day lender and collect a fee, which you will end up paying for later on. Brokers have no purpose other than to charge you more than you need to pay, and for this reason are best avoided. ​

Check the company is operating and can pay on the same day

There is no point applying for a Same Day loan if you have to wait. Some lenders have websites but no longer function, especially after the law changes to make lending less unaffordable. To prevent uncertainty, the best approach is to call a lender to make sure they’re operating. All of those in our list are active and offering same day loans.

What information do I need to be able to apply for a Same Day loan?

​Generally you need to meet the following requirements to qualify for a Same Day loan:

• Be at least 18 years of age, living in New Zealand
• Receive an after-tax income above $350-$400 per week, and be in permanent employment (as an employee). Your employer may be contacted to verify your employment. However, Same Day lenders do not disclose the nature of the loan.
• A proof of address, like a bank statement or utility bill.
• You need a bank account, and your income needs to be shown to be deposited into that bank account.
• You need a mobile phone and email address
• You can receive a Same Day loan if you also receive a benefit, but you must still meet minimum weekly income thresholds. ​

Same Day Loan Alternatives

Please consider each of the following options before committing to a same day loan:

1. ​Hardship Assistance (Urgent Costs and Living Expense Assistance from Work and Income) - our dedicated Hardship Assistance guide and Work and Income tips guide for maximising the chances of being approved outline what's available from the government free of charge. This should be explored first before applying for any new loan.
2. Accessing KiwiSaver to pay bills (if you have a balance available) - you will need to prove that you cannot meet your 'minimum living expenses' (i.e. basic food and grocery items, and accommodation costs - including rent, mortgage repayments, interest etc), among other expenses. Our KiwiSaver hardship guide has more details. 
3. Free and discounted loan providers (if you are low income or unemployed). A number of incredibly helpful community lenders who offer fee-free or low-interest loans to anyone with a low income, including Good Shepherd New Zealand and the Nga Tangata Microfinance Trust.
4. Borrowing from friends and family - Depending on your family situation, this can be an option to get a helping hand while you prioritise other bills and improve your financial position. It's not without its risks however - if you can't repay, you can lose friends and upset people. But, for many people, it works just fine. How much to ask for and who to ask is something that needs a bit of consideration.
5. Using a credit card to withdraw money - if you have balance available on your credit card, withdrawing the money from an ATM or transferring it to pay a bill using internet banking is ALWAYS cheaper than a same day loan. Credit card interest rates are 10% p.a. to 26% p.a. whereas same day loans can start at 50% plus fees.

The "Top 3 Least Worst" Same Day Loans

• ​We don’t agree with Same Day loan practices and their high-interest and fees, so for that reason we have called the least expensive lenders the “least worst”. We’ve done our best to make it clear what fees you will pay and how to reduce your overall Same Day loan cost. 
• We outline everything you need to know about fees, interest rates, repayment problems and what to do if you think you've been taken advantage of by a Same Day lender. 
• We have not linked any Same Day lenders to this website as our view towards them is very negative, and we believe there are alternatives. Our presentation of loan repayment calculations is for illustrative purposes only. 
  
• Our “least worst” Same Day lenders are ordered from lowest to highest annual interest rate, indicating affordability:

Annual interest rate: 49%

1. Total repayment for $500 borrowed for 2 weeks: $541.96
2. Total repayment for $500 borrowed for 4 weeks: $$551.81
3. Total repayment for $1,000 borrowed for 2 weeks: $1091.81
4. Failed Payment/Default Fees: $30

Annual interest rate: 167.9% to 292% + Establishment fee: $46 to $150

1. Total repayment for $500 borrowed for 4 weeks: Up to $589.64
2. Total repayment for $1,000 borrowed for 4 weeks:  Up to $1,239.34
3. Failed Payment/Default Fees: $40 - $50 per week

*Note that minimum loan terms is 4 weeks.
*As of 01 May 2020, the total interest(s) and fee(s) charged on all of their newly contracted high-cost loans are capped at 100% of the amount of the loan advance. For example, the maximum recoverable for a non-related loan of $300 must not exceed $600.

Annual interest rate: 250%  + Establishment Fee: $58

1. Total repayment for $500 borrowed for 2 weeks: $676.2
2. Total repayment for $500 borrowed for 4 weeks: $744.13
3. Total repayment for $1,000 borrowed for 2 weeks: Not permitted, maximum loan is $600
4. Failed Payment/Default Fees: $10

Other Same Day lenders and their annual interest rates

• Paydayloan.co.nz: 44.95% 
• Savemybacon.co.nz: 49.95% (read our review)
• Moola.co.nz: 292% (92 to 183 days, loans between $500 to $2,000) (read our review)
• Cashburst.co.nz: 44.95%
• Paydayadvance.co.nz: 44.95%​

Must-Know Facts About Same Day Loans

Understand the Fees and Interest Costs BEFORE Agreeing to a Same Day Loan

• The interest rates charged will vary hugely at any moment, and we recommend shopping around for a Same Day loan - receiving money may be urgent but the differences in interest rates between lenders can be significant.
• The more regular repayments you can make, the cheaper your loan will be. Making four payments of $100 each week is going to decrease your outstanding loan and therefore incur much less interest expense than making a payment of $400 at the end of the month.
• Lenders commonly charge around $20 to $40 if you pay late. Additionally, some lenders charge a late payment penalty interest rate of 0.25%-0.5% per day for the loan balance owed.
• The higher the interest rate, the more expensive the loan is.​

If You Can't Repay, You'll Need to Notify the Lender Right Away

All Same Day lenders are prepared for this situation and offer solutions to help you. You'll need to follow everything through from your end to have the best shot at being helped out. The process is (generally) as followed:

1. Contact your lender as soon as possible and be honest with them about the fact you are unlikely to be in a financial position to repay. You will be given the option to adjust the repayments to best suit your cashflows. Be aware that the longer the repayment term, the more interest charges you will have to pay.
   
2. Make the case for hardship (if applicable): If you have suffered illness, injury, loss of employment, the end of a relationship, or any other reasonable cause to be unable to make payments since taking the loan, you can apply under financial hardship with your lender. Lenders offer loan repayment holidays and/or interest caps when their conditions are met.

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Important: If you do not contact your lender and do not make payments, you will be chased and billed for the chasing, ranging from $10 per letter sent to $500 for a court order. Non-payment has the potential to cause a lot of hassle.

If you feel as if you’ve been misled or taken advantage of, you can complain

​You can take your lender to the (free) Financial Ombudsman Service which can adjudicate. Before you do that, you must complain to the Same Day lender first. If you are not satisfied with their response, take your case to the Ombudsman. You'll need to have all records of your dealings whereby it will be assessed and either be heard or rejected. 

Same Day Loan Conclusion

We are not fans of Same Day loans despite recent government law changes to make them less financially crippling to borrowers. Alternatives do exist - our guide to bad credit loans and loans for unemployed explain more. We also suggest looking at our personal loans guide and low-interest credit card guide.

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