A payday loan is quick. It's also one of the most expensive ways to borrow.
If money's short and you need a small amount fast, a payday loan can feel like the only door. It isn't. These loans are legal, but at the legal maximum a $2,000 loan can cost around $1,360 in fees over a year. Before you sign anything, it's worth two minutes to see the real cost — and the lower-cost options that often work better. We don't offer payday loans; we help you find an affordable path, and if borrowing isn't the answer, we'll say so.
The cost of credit, compared.
Same amount borrowed — $2,000 — but very different price tags. This is the indicative cost of credit (fees plus interest) over 12 months, at each option's typical or legal-maximum cost. The payday bar is not a mistake.
Indicative only — an illustration, not an offer or a quote. Payday / Small Amount Credit Contract (SACC) fees are capped by law at a 20% establishment fee plus 4% of the amount borrowed each month; on $2,000 over 12 months that's about $400 + $960 = $1,360 in fees (repaying roughly $3,360). A SACC's fees are not expressed as an annual interest rate, so it is not directly comparable to a personal loan's comparison rate. The personal-loan figure is indicative only — pricing is risk-based and varies by lender and circumstances; a comparison rate can differ from an advertised rate. NILS is 0% interest with no fees, for eligible people buying essentials.
How payday fees are built — and why they add up so fast.
Payday lenders don't quote an interest rate. They charge flat fees, capped by law. The caps sound small as percentages, but stacked over the life of the loan they're anything but.
Establishment fee
A one-off fee of up to 20% of the amount borrowed, charged the moment the loan starts. On $2,000 that's $400 before you've repaid a cent.
Monthly fee
Up to 4% of the amount borrowed every month the loan runs. On $2,000 that's $80 a month — $960 across a year — on top of the establishment fee.
Minimum term & warnings
The law bans SACC terms under 16 days and requires lenders to show repayment warnings — protections worth reading before you commit. There's usually a short cooling-off window too.
Four options that usually cost far less.
Depending on what the money is for and your situation, one of these may fit — and cost a fraction of a payday loan. None of them suits everyone; the right one depends on your circumstances.
No Interest Loan (NILS)
Run by Good Shepherd, NILS lends up to $2,000 for household essentials — a fridge, car repairs, medical or dental costs — at 0% interest with no fees. Generally for people earning under $80,000 (or up to $100,000 with a partner or dependants) with a Health Care or Pension Card. Call 13 64 57 to find a local provider.
Centrelink Advance Payment
If you receive an eligible Centrelink payment, you may be able to get part of a future payment early and repay it from your later payments. It's interest-free — you pay back exactly what you took, nothing more. Check your options through Services Australia or myGov.
A properly assessed personal loan
For larger or longer-term needs, a mainstream personal loan is usually far cheaper than a payday loan — but only if the repayments genuinely fit your budget. Pricing is risk-based and varies; a comparison rate can differ from the advertised rate. We compare options across our panel and will only proceed if it's affordable for you.
A hardship arrangement
If the money is to cover a bill or existing debt, you may not need a new loan at all. Utility providers, banks and the ATO must consider hardship arrangements — smaller payments, pauses or waived fees. A free financial counsellor can set this up with you (see below).
When borrowing more would make things worse, talk to someone first. it's complimentary.
If you're borrowing to cover everyday costs, to pay another loan, or because you've run short before payday, a new loan can deepen the hole rather than fill it. These services are free, confidential, and there's no judgement — thousands of Australians use them every week to get back on top of things.
Free, confidential financial counselling. Weekdays 9:30am–4:30pm; live chat at ndh.org.au. Counsellors can talk to your creditors for you.
0% loans up to $2,000 for essentials — no interest, no fees — for eligible low-income households. Find your local NILS provider.
The government's free money guidance, including a payday loan calculator that shows what a loan will really cost before you commit.
These are free, not-for-profit and government services, listed for your information — we're not affiliated with them and receive nothing for referring you. If you're in genuine hardship, please reach out to one of them before taking on new debt.
Our honest position
Esteb & Co does not offer, arrange or promote payday loans or high-cost small-amount loans. If you ask us for help with a small, urgent shortfall, we'll usually point you to NILS, a Centrelink advance, or free financial counselling first — because they cost less and won't trap you.
Where a properly assessed personal loan genuinely fits your budget and does more good than harm, we can compare options across our panel. Where it wouldn't, we'll tell you plainly.
Any figures on this page are indicative estimates for general information only, current as at July 2026, and are not an offer of credit, a quote, or advice. Fees and eligibility change — confirm current details with each provider.
Payday loans and the alternatives, answered straight.
How much does a payday loan actually cost?
Payday loans — legally, Small Amount Credit Contracts — don't charge interest; they charge fees, capped by law at a 20% establishment fee plus 4% of the amount borrowed per month. On a $2,000 loan over 12 months at the maximum, that's about $400 plus $960 in monthly fees — roughly $1,360 in fees, repaying around $3,360. Because the fees aren't an annual interest rate, a payday loan isn't directly comparable to a personal loan's comparison rate. Figures are indicative only.
What's a cheaper alternative to a payday loan?
It depends what the money's for. For household essentials, a No Interest Loan (NILS) from Good Shepherd lends up to $2,000 at 0% with no fees. If you're on Centrelink, an Advance Payment lets you draw part of a future payment early, interest-free. For larger needs, a properly assessed personal loan is usually far cheaper than a payday loan — provided the repayments genuinely fit your budget.
Can I get NILS or a Centrelink advance instead?
Often, yes. NILS is generally for people earning under $80,000 a year (up to $100,000 with a partner or dependants) who hold a Health Care or Pension Card, and covers essentials up to $2,000. A Centrelink Advance is available on many eligible payments through Services Australia or myGov. Both cost far less than a payday loan — NILS and the advance are interest-free.
I'm behind on bills — should I take a loan?
Usually not before you've spoken to a free financial counsellor. Call the National Debt Helpline on 1800 007 007 (free and confidential). Utility companies, banks and the ATO are required to consider hardship arrangements — smaller payments, pauses, or waived fees — which can solve the problem without new debt. Borrowing to pay existing debt often makes things worse.
Does Esteb & Co arrange payday loans?
No. We don't offer, arrange or promote payday or high-cost small-amount loans. We help people find affordable finance across a panel of 50 lenders, and where borrowing isn't the right answer we point you to lower-cost or free options instead — NILS, a Centrelink advance, or financial counselling.
Where can I check the real cost before I borrow?
ASIC's MoneySmart website has a free payday loan calculator that shows the total cost of a small-amount loan before you sign. It's a free government resource and takes only a minute. We'd always encourage you to run the numbers there first.
Not sure which option fits? Let's work it out together.
Tell us what the money's for and your situation — we'll help you find the lowest-cost path that's actually affordable, or point you to free help if that's the better move. No credit check to start.
Check my options →