Payday loans for students

Studying and need extra cash? Short-term payday loans may be the fast and convenient solution you need

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student loan

Payday loans for students are an interim option that lenders design to provide money to cover your financial commitments until your next pay. Loan providers offer these types of loans for anywhere between $100 and $2,000 to help students deal with different financial situations, which could include paying for an unexpected phone bill or other emergency costs.

Find out how these loans work and if they are an option for you to consider.

⚠️ Warning: be cautious with short-term loans

If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call the MoneyTalks helpline operated by FinCap on 0800 345 123. It is open from 8:00am to 5pm, Monday to Friday and 10am to 2pm Saturday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged.

Alternatives to short-term loans

Consider these alternatives before applying for a payday loan:

  • Use online Government resources. The Commerce Commission New Zealand website explains how loans works and what to be aware of when borrowing from a lender.
  • Payment plans. Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan or receive an extension on your due date if you’re behind on payments.
  • Contact your creditors. Speak with creditors about extending the due date of your payment, or working out a new payment plan that works for both of you. Seek personal loans elsewhere. Consider a small personal loan from a bank or a credit union. You may qualify for a loan with much lower interest rates than those offered by payday loan companies.
  • Pay with credit card. Consider paying with your credit card to cover your emergency bills or payments. This is not a long term solution, as you’ll need to pay off the balance as soon as possible, but it’s an alternative to a short term loan with high – and immediate – interest rates.

Comparison of payday loans for students

Select ‘Compare’ to see if you meet the lender requirements.

Name Product Max Loan Amount Loan Term Turnaround Time Loan Interest Establishment Fee Account Administration Fee
Save My Bacon Mini Loan
$750
1-8 weeks
Same day
49.95% p.a
$95
$10
Short term loans up to $750 with no hidden fees. Eligibility: Be 18 or over, have an income of at least $400 per week and be a NZ citizen, permanent resident or have a valid work visa.
Teensy Cash Loan
$1,400
6-12 months
Same day
39.95% p.a.
$95
$15
Eligibility: Must be at least 22; in full time employment or receive a full-time benefit; have a minimum income of $500 per week after tax; be a New Zealand citizen or permanent resident.
Moola Payday Loan
$2,000
Up to 184 days
Same day
292% p.a.
$0
N/A
Borrow up to $2,000 and enjoy a flexible repayment plan. Eligibility: Be 18 or over, have an ongoing source of income, working visa applicants accepted (conditions apply).
Teensy Payday Loan
$900
6-16 weeks
Same day
292% p.a.
$0
N/A
Eligibility: Must be at least 22; in full time employment or receive a full-time benefit; have a minimum income of $500 per week after tax; be a New Zealand citizen or permanent resident.
Save My Bacon Flex Loan
$5,000
8-52 weeks
Same day
49.95% p.a
$95
$10
Medium term loans from $1,000 to $5,000 with no hidden fees. Eligibility: Be 18 or over, have an income of at least $400 per week and be a NZ citizen, permanent resident or have a valid work visa.
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Compare up to 4 providers

How does a payday loan work for students?

Payday loans for students offer emergency funding. Most students do not have a steady income and may have problems getting approval for a standard loan. Payday loans provide short-term finance with flexible lending criteria and short approval times and allow students to access emergency funds that they can repay when they receive income from other sources.

Students need to provide identification details and show they can comfortably repay a loan, by providing 90 days worth of bank statements, before they can potentially receive approval for a payday loan. The online application and approval process removes the need for paperwork or face to face meetings, ensuring you get the cash faster. Remember, the lender may require you to repay for the loan in less than a month, depending on the specific terms, and the interest rates are substantially higher than you find in a standard personal loan.

How much will the loan cost?

It’s essential to educate yourself before you take out a payday loan. It may seem an easy thing to do, but you should be aware of the interest and fees that lenders charge. Here are the costs to take into account:

  • A one-off establishment fee.
  • The interest which varies according to the lender. Make sure you compare loan providers to find a rate that is competitive.
  • Enforcement expenses if you fail to pay back the loan.

Are students eligible for payday loans?

To be eligible for a payday loan you need to be over the age of 18 and in receipt of a regular income. However, what if:

  • You’re a casual employee. Lenders need to see evidence of a steady income, but some will accept casual employees. You need to show you’ve received earnings for at least three months to be eligible.
  • You receive Work and Income payments. Some lenders may consider those receiving Work and Income benefits for short-term loans. You may also be eligible if you’re unemployed, so make sure you check out the lender’s website for its eligibility criteria.
  • If you have bad or no credit. Payday lenders are flexible when it comes to your credit situation. Some accept applications if you have a default or even two. If you’re unsure, it’s best to contact the loan provider before you apply.

How can students compare their options?

  • Loan term.
    Being a short-term option, a payday loan usually has a term of between two days and one year, depending on how much you borrow. When choosing a payday loan, consider when you are likely to receive your next income, so you can match this to your repayments and avoid late payment penalties. Make sure you choose a term that suits your finances and specific circumstances.
  • Approval time.
    The reason for applying for a payday loan is to avoid waiting for approval, and hopefully receiving your cash instantly. It’s essential to compare your options and choose a payday loan company with a fast and easy online application process, with no paperwork, meetings or judgment. Naturally, it also comes down to your financial needs and goals.
  • Interest charges.
    The fees and charges of a payday loan work similarly to an interest rate calculation. Compare the APR on different payday loans for students to ensure you avoid paying exuberant fees, (especially if you miss a repayment). Payday loans usually have more substantial interest charges, so take time to shop around and find a relatively cheaper short-term solution to your financial hardship, before settling on a specific one.
  • Late payment fees.
    While shopping around for a payday loan, be sure to read the fine print and avoid being caught off guard by crippling late payment penalties. Borrow only what you need, and make sure you can manage the repayments, to avoid falling into the trap of paying outrageous amounts in penalties and interest fees.
  • The application process.
    You should consider a lender with a trustworthy reputation; a simplified online application process and an approval provision that allows you to find out if you qualify for a loan in minutes. Also, funds should preferably be sent to your bank account the same day.

Peter's payday

student thinking about a loanPeter got a nasty shock when checking his bank balance on Tuesday morning. He has spent a lot of money on food and petrol, and bought his roommate an expensive birthday present – more extravagant than he can afford. It is still two weeks until Peter’s part-time job pays his wages, and three weeks until he receives his next Work and Income payment. The money in his account isn’t going to be sufficient for rent and everyday expenses.

Peter’s employment situation and income mean he isn’t eligible for a credit card or a personal loan from a bank. He considers a payday loan as a one-off, short-term alternative. Peter finds he qualifies with a few different payday lenders, so he compares his options and finds one that can provide the money he needs. Peter submits his application online and receives the loan a few hours later.

What are the risks when obtaining a student cash loan?

  • Inability to make repayments. It is vital to bear in mind that like all short-term loans, payday loans for students have a high-interest rate. These rates could mean that by the time you pay off your loan, yet again there aren’t sufficient funds in your account to carry you through until your next payday. You then need to apply for another loan, but this cycle is unhealthy for your finances and is a way to end up in even more debt.
  • Excessive fees. If you take on a payday loan, ensure you make your repayments on time, as these loans usually carry hefty penalties if you miss payments. Paying extortionate fees for late payments is an issue for people with regular income, let alone students. It can suck you into a cycle of debt and may ruin your credit rating, and make it harder to access a mortgage in the future.

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