When You Shouldn’t Apply for Same Day Payday Loans

Same day payday loans, as well as payday loans in general, tend to have a lot of stigma around them.

However, payday loans can be an excellent alternative with emergency financial situations arise.

But when are same day payday loans a good idea, and when are they more hassle than beneficial?

We put together a guide to understanding same day payday loans and how to figure out when they are the best choice for your financial situation.

Check out what we found!

What Are Same Day Payday Loans?

By definition, a payday loan is a short-term loan that typically caps at $500 or less. Most payday loans are due on your next payday.

“Same day” payday loans are simply payday loans that are approved the same day you have applied and funds from the loan are distributed on the same day as well. Most payday loans are same day payday loans.

Typically, a payday loan boasts a higher interest rate that most loans. However, because of their very short lifespan (the typically pay period is two weeks or less) and relatively low loan cap, these interest rates are not nearly as intense as they seem when you crunch the numbers.

For example, say you have an emergency and cannot pay your credit card bill on time this month. The payment of $100 will be subject to late fees in the $40-50 range and higher minimum payments. You have more than enough money in your upcoming paycheck to pay for this.

By taking out a $100 payday loan as a solution to pay your credit card payment with a 30% interest rate, you spend less money on interest fees and prevent a raise in your minimum payments.

As we said, payday loans are designed to be very short term.

Same Day Payday Loans – When Are They Not The Right Choice?

Same day payday loans are absolutely beneficial for the following circumstances:

  • Medical emergencies that cause a few days of work absence
  • Sudden financial emergencies
  • A forgotten due date for a bill with a high-interest rate or late fee

However, there are many situations in which a same day payday loan is a really terrible idea.

There are financial situations out there that may make payday loans look appealing, but if you are unable to pay that money back on time, you could find yourself in a whirlpool of debt that is very hard to get out of.

First and foremost, there are two major common things you should not use your payday loan money to pay for:

  • Another debt (credit cards, other personal loans, other payday loans)
  • Non-necessities

What exactly are non-necessities? Here are just a few things that really don’t require payday loan debt to pay for.

A Hot Date

If you’ve started dating someone and want to impress them with fine dining, movies, and other expensive date activities, you may need to tone it down a bit.

Taking out payday loans and then rolling them over every pay period can get dangerous, and in the long-run, you aren’t being totally honest with your new beau. Be open about when you can afford things and when you can’t. If your partner understands your honesty, congratulations!

Spending too much time in the payday loan cycle can lead to higher interest rates, so it is best to reserve them for emergencies or very important things– not movies and a fancy dinner.

Business Investment

You should never use a payday loan to put into the stock market or another risky business investment. Investment is never a guaranteed return— sometimes you will lose that money instead of getting it back. Sometimes it can take months or even years to see a return on the investment.

The key to making a good investment is to do an ample amount of research on the project and company you are investing in and to use your own money instead of money from a same day payday loan to fund the investment.

Just as well, you should only invest an amount of money that you can afford to use and consult a financial expert to see if the investment is even worth it.

If you want to make more with a business investment, you should use money that you’re not at risk to have to pay back to anyone. If you lose on the investment, that’s a bummer, but at least you aren’t in debt. If you do get money back, it’s all yours!


Got an itch for some impulsive shopping? Scratch that itch in some healthier ways, because taking out a payday loan for a shopping spree is downright dangerous.

If you don’t have the money right now to go on a shopping spree, you won’t have it when you get paid. Shopping addiction and impulsive shopping is a very easy way to get into debt, and it should be seen for what it is– an addiction.

A Vacation

If you have the money for a vacation, you’d have taken one already.

Using a payday loan to fund a vacation and pay for things like flights, hotels, expensive food, tours, and other things is a good way to plummet into debt quickly.

Save up your money for that luxury vacation and think of staycation ideas in the meantime to save you a big chunk of change.

A Giant Party

Liquor, beer, a DJ, food, and other huge party essentials aren’t going to pay for themselves! However, a payday loan shouldn’t pay for them either.

A big party isn’t going to return anything to you financially. It may be memorable and fun, but you’re going to have a major headache from overspending your payday loan. One night of awesomeness shouldn’t equal months of financial hardship.

Borrow Responsibly Today

Was our guide to when you shouldn’t apply for same day payday loans helpful in your time of need?

Tell us your thoughts, along with your experience with same day payday loans, in the comments below!

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.


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 – Moneysmart.gov.au.

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