Cash between paychecks? You’ll want to know about on demand pay. Alternatives may be available to you for up to $15,000 through Monzi!
What is on-demand pay?
There are several names for the concept of on demand pay. Whether an on-demand check or a wage advance service, the list is lengthy. However, pay on-demand is simply the idea of accessing your paycheck before payday. Also known as before pay services.
Employee paychecks can be daily, weekly, fortnightly, or monthly depending on your job and employer’s pay structure. One of the first things to investigate when looking for a new job is how frequently you’ll receive your paychecks. This allows you to identify whether it will suit your financial lifestyle. For example, you may live a high expense lifestyle and start in a job that pays monthly. You may then have to reevaluate how you budget.
However, occasionally unexpected circumstances may arise that require extra cash. Whilst you have several options available in such a situation, avoiding attached interest can be convenient. Instead, you could be engaging with a company that lends you money from your future paycheck without interest. Then, when payday rolls around, they might possibly take what you owe directly from your bank account. Read more about buy now pay later no credit check in Australia here. Learn more about pay advance here.
How frequently can you use on demand pay?
You can access your pay early to an extent. How much you are allowed to use, and how frequently, will depend on your provider. For example, some companies may let you only take as much as you’ve earned. Meaning that if you get paid fortnightly and have only worked one week, you may only be able to access the sum of your earnings from this time frame. In contrast, other companies may allow you to borrow up to a certain percentage of your incoming paycheck.
How frequently you can request money will also depend on your provider. Some companies may only allow you to borrow one amount between paychecks. Others may permit multiple pay on-demand withdrawals. If these details of when and how you can access your paychecks are essential to you, you should shop around to find a provider that fits your needs.
Pay on-demand vs Access your pay early
Access your pay early Australia and pay on-demand are essentially the same. The companies in this industry set themselves apart from traditional loans via a no-fuss repayments approach and the speed your money can reach your account. This means that when it comes to picking such a company for fast loans, your primary considerations should be how much you can request and what documentation they require.
Pay on-demand isn’t the only financial service improving its accessibility. Monzi has been streamlining its lender-finder process to make finding non bank lenders for personal loans a breeze. Monzi is 100% online and paperwork free, meaning as long as you have an internet connection you can place an application. With the potential of same day loans available, why wouldn’t you look deeper into what Monzi has to offer?
Do pay on-demand apps hurt your credit?
As with most situations that involve borrowing money, there is potential to damage your credit score with pay on-demand services. However, this possibility is relatively low. This is because there isn’t an immediate negative impact. If you don’t get paid as much as you should have one paycheck, and cannot return what you owe to the company, it essentially becomes an IOU for your next paycheck.
With buy now pay later services, there is also less room to injure your credit score than with a loan. However, in both cases, it is still possible. Keep in mind that making responsible repayments is always in your best interest. If you aren’t doing so, you run the risk of injuring your future loan chances. This may leave you needing to apply for bad credit loans and struggling to apply for large loans through financial institutions.
Do pay on-demand services conduct credit checks?
Typically, your credit score is less critical to your pay on-demand provider than your income is. This is for a couple of reasons:
- You’re withdrawing from your future paycheck. Whilst using pay on-demand is technically taking a loan from your provider, you cannot borrow more than you earn.
- There is usually no interest attached to accessing your paycheck early as it is your own money.
- Pay on-demand services often make money off additional transaction fees rather than interest.
- Your repayments withdraw automatically, and your ‘loan’ stays out of sight, out of mind.
This reasoning may vary depending on the provider you opt with. However, this is an essential list of some of the reasons why credit checks generally aren’t crucial to your pay on-demand provider. This does not mean that all providers operate the same. It may be wiser to expect a credit check when applying rather than being unprepared.
Personal loans vs pay on-demand
Both personal loans and pay on-demand have their pros and cons. There are several great features about accessing your pay early. These being that you won’t have to pay interest, and you can potentially have the money in 60 seconds. However, you will be bound to the size of your paycheck, meaning if you don’t get paid enough per paycheck to cover the expense, it may not be the best option.
Alternatively, personal loans can offer you a lot more than borrowing from your paycheck can. Providing you have an adequate income and a good credit score, you may easily be able to obtain large personal loans. However, if you have a low credit score, you may have a better chance of approval for small personal loans. Regardless, there will be interest attached, and it’s unlikely that your payments will be automatic. If you aren’t sure whether you can manage the repayments, the government’s MoneySmart site has a great page on loans for further information.
Consider your circumstances first before coming to a decision. Depending on your situation and money management skills, one option may be better than the other for you. If you are struggling with money, consider speaking with a free financial adviser from the National Debt Helpline.
Are there additional costs for pay on-demand
It’s hard to say what you may need to pay when using a pay on-demand provider as the costs will vary by provider. However, you can expect a transaction fee when you request a portion of your paycheck. This may only be a small percentage; however, this amount could stack up if you request pieces of your paycheck multiple times. Also, note that depending on the provider, you may encounter ongoing maintenance fees.
Do you know what won’t cost you a cent? The Monzi lender-finder. If you would instead like to take a personal loan, Monzi can potentially match to a lender free of charge.
Is pay on-demand like a payday loan?
In theory, pay on-demand is somewhat like a payday loan. In the sense that it is technically a loan that you take when you are between paychecks and need some extra cash. Pay on-demand, however, is a lot more likely to be a safer practice.
Payday loans can have concise terms with high-interest rates that can catch the unprepared borrower off guard. This means that it becomes pretty easy to establish a debt cycle with such a loan. Therefore, pay on-demand that comes without any attached interest is a safer option. It can also limit you to what you earn, unlike some payday loans Australia.
Personal loans or emergency loans can be a safer alternative to payday loans. Particularly if you need more money than what on-demand pay can offer you. Therefore, if you would like a safe and understanding lender that can listen to your situation, consider the Monzi lenders. Let us do our best to try and match you to a lender who may be able to help.
