Your Guide to Understanding Payday Loans

[vc_row type=”in_container” full_screen_row_position=”middle” column_margin=”default” column_direction=”default” column_direction_tablet=”default” column_direction_phone=”default” scene_position=”center” text_color=”dark” text_align=”left” row_border_radius=”none” row_border_radius_applies=”bg” overlay_strength=”0.3″ gradient_direction=”left_to_right” shape_divider_position=”bottom” bg_image_animation=”none”][vc_column column_padding=”no-extra-padding” column_padding_tablet=”inherit” column_padding_phone=”inherit” column_padding_position=”all” column_element_spacing=”default” background_color_opacity=”1″ background_hover_color_opacity=”1″ column_shadow=”none” column_border_radius=”none” column_link_target=”_self” gradient_direction=”left_to_right” overlay_strength=”0.3″ width=”1/1″ tablet_width_inherit=”default” tablet_text_alignment=”default” phone_text_alignment=”default” bg_image_animation=”none” border_type=”simple” column_border_width=”none” column_border_style=”solid”][vc_column_text]If you find yourself in a financial pickle, you have a few options. One of them is a payday loan. With this loan, you can apply and have your money in minutes. It’s a quick and easy alternative to other forms of loans.

What is a payday loan?

A payday loan is a fast cash loan that lets you borrow small amounts. Specifically, Cigno Loans can help you borrow up to $1,000.

The loan is paid back on your next payday. This makes payday loans convenient for covering unexpected expenses you can’t afford until your next pay cheque.

A payday loan is also referred to as:

The difference between a payday loan and personal loan?

People often confuse a payday loan with a personal loan. Although they both are options for funding, they offer different terms.

Here’s a brief comparison of personal loans and payday loans:

Payday loan

  • Easy loan application process — no credit check required
  • Application approval is quick — usually 30 minutes or less
  • Typically repaid within a month or on the borrower’s next payday
  • Doesn’t show up on your credit report
  • Lending cap amounts anywhere from $300 to $1,000.

Personal loan

  • Extensive loan application process — credit approval required
  • Application approval can take up to seven days
  • Repayment terms up to three years
  • Shows up on your credit report
  • Lending cap amounts from $1,000 to $10,000

The type of loan you take out depends on how much you need to take out and how fast you need the money.

If you have a limited or poor credit history, a payday loan may be a suitable option. A payday loan may be an acceptable option if you need a small amount of money fast.


Compared to other loan providers, payday lenders have less strict lending criteria.

Many payday lenders have different eligibility requirements, but applicants should meet the following minimum criteria:

  • Be over 18 years old
  • Be an Australian citizen or permanent resident
  • Be employed or receive regular income — Centrelink benefits are accepted.
  • Some applicants may also need to supply the lender with 90 days’ worth of bank statements, employment details, copies of bills, and Centrelink receipts.

How do payday loans work?

After your application is approved, you will receive your loan the same day. Some borrowers see funds in their bank account in less than an hour. How fast your loan arrives will depend on your bank.

Many payday lenders will allow borrowers to choose their own loan repayment term. However, repayments are usually taken out in line with when you receive your pay cheque.

If there aren’t enough funds in your bank account to cover repayments, your lender and bank may charge a fee. This brings us to our next point about payday loans.

Rates and fees?

Payday lenders are not allowed to charge interest, but they can charge fees. According to the Australian Securities and Investment Commission (ASIC), payday lenders are allowed to charge borrowers for loans under $2,000:

  • A one-time establishment fee of up to 20 per cent of the loan amount
  • A monthly account keeping fee up to 4 per cent of the loan amount
  • A government fee
  • Default fees — up to 200 per cent of the loan amount
  • Enforcement fees — this only happens when a lenders has to take you to court if you fail to repay the loan.

What if you can’t afford to repay a payday loan?

If you can’t make a repayment, you should let your lender know immediately. Some lenders have financial hardship departments that can delay your next payment. That way, your bank or lender won’t charge you a failed repayment fee.

To avoid a missed payment, it’s wise to set aside enough money to cover your loan repayments. But if you still think you can’t repay your loan, you can contact your lender and discuss other options.

The last thing you want to do is ignore a loan repayment. At Cigno, a missed payment fee could cost you $79 or more.

Are payday loans “bad”?

A payday loan isn’t always an appropriate financial solution. However, there are plenty of circumstances where a small cash loan is a valid and effective way of meeting immediate expenses.

While some payday lenders in the past have acted unscrupulously and tarnished the industry, payday loans remain a legitimate solution for people who need small amounts of money quickly and are in the position to comfortably repay the loan in the near future.

The benefits of a payday loan?

Although small amount loans are convenient, they may not solve your money issues. However, many borrowers prefer them because of their quick availability and convenience.

Here are a few other benefits of payday loans.

Quicker and easier application process

Other loan options involve a lengthy process. On top of that, some people may not qualify for other loan types.

But with a payday loan, all you need is basic personal and financial information. This offers a much less stressful application process than other loans.

No credit checks

A poor credit score is one of the many barriers customers face to getting a loan. However, with payday loans, you don’t need a certain credit score to qualify.

Apply for a payday loan with Cigno

Payday loans are a great way to get emergency cash. And they don’t present barriers like other loan types.

Although it’s tempting, we don’t recommend taking out a quick cash loan to pay your bills. Using a payday loan for other debts will only further the amount of debt you’re in.

If a payday loan sounds like the right option for you, apply today!

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.[/vc_column_text][/vc_column][/vc_row]


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice –

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat