When it comes to on-demand pay, your mind may think of a couple of different things. Maybe your first thought is on-demand TV. Or, perhaps you instead think of receiving your paycheck early. Both options have high search volumes online. However, the focus of this article is how you can access your pay early Australia.
There are many options to help you get by when you find yourself in need of some more cash. Whether they be no credit check loans, credit cards, online payday loans, or government grants. But, if you prefer to ‘borrow from yourself’ in a sense, then pay on-demand may be a good alternative for you.
Please note that specific ideas and products presented in this article may not be on offer by Monzi or the lenders we work with. This article presents only general information. Consider seeking professional financial, taxation, legal or other advice to check how the information and ideas presented on this website relate to your unique circumstances.
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.
Why would you need on-demand pay?
Pay on-demand can be incredibly useful in surprises or emergencies. Here are some circumstances where pay on-demand may be helpful:
Theoretical 1: A car accident
You have gotten into a car accident, and your car needs major repairs. Your insurance covers 80% of the repair costs, but you can’t afford to cover the remaining 20% yourself. On demand pay can be a great way to avoid a typical loan, as you can borrow from your future paycheck to get your car repaired.
Theoretical 2: Grocery shopping
Perhaps it has been a week full of bills that have needed paying. You have successfully addressed all your expenses; however, you haven’t factored a grocery shop into the weekly budget. Using Pay on-demand allows you to keep food on the table for your family without using your credit card.
These are just a few theoretical scenarios; however, they demonstrate how pay on demand may be helpful when you are in a sticky financial situation.
How does pay on-demand work?
Depending on the method or provider you chose, accessing your pay on-demand can vary. If you use a pay on-demand company, you will need to start by making an account. Generally, these companies function through an app or website, and when you create an account, you will also give them some information about yourself and your paychecks. From there, you will have to link the bank account that your paychecks deposit into. This streamlines the process.
Then, you are good to go. Depending on the company, you may be able to access any amount within the bounds of your paycheck. Alternatively, you may only be able to access the amount that you’ve already earned at whichever point in the week you are at. Regardless, once you have done so, the company will immediately withdraw what you owe them when your next paycheck enters your account. This is as the company is essentially using their own money in the place of the cash you are earning.
On-demand pay vs on-demand TV
Depending on which demographic you belong to and how you manage your money, what you think of when you hear the phrase ‘on-demand’ may vary.
If you think of Freeview or Foxtel, then you are most likely a big fan of having as many channels as you like available when you want them. However, getting your pay on-demand is arguably far more helpful to many people. Particularly in this day and age of streaming service bills that may need paying between paychecks.
However, if you are looking for a new TV with as many available channels as you would like, Monzi can possibly help with this. If you need a loan of $300 to $10,000, our lender-finder may be able to match you to a lender who might extend a helping hand.
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?
Why would you want your paycheck early?
There are several reasons that you might want your paycheck early. The theoreticals above touch on this. However, did you know that you can use personal loans in a lot of other instances? With personal loans, you can potentially receive approval within the day, to get you back on your feet. Here are some examples:
- You exceed your phone data limit and want to access your paycheck early rather than dipping into your savings to cover the cost.
- Your friend is offering to sell you their concert tickets for an artist you love. The price is somewhat hefty, pay on-demand has got you covered.
- Something has come up with family members in another city; you choose to pay on-demand for spontaneous plane tickets to visit them.
Being able to use pay on-demand can be more convenient than you first realise. Particularly if you are working to avoid having to touch your savings account.
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.
Monzi lenders and credit checks
However, if you are looking for a more significant amount than what your paycheck can offer you, you may need to look elsewhere. Credit checks accompany most financial institution loans. So, if you are looking to avoid this and instead seek private loans, Monzi may be able to help. The lenders in the Monzi network can potentially offer no credit check loans if your credit report is looking sad.
Monzi can’t speak on behalf of all the lenders in our network, as each lender operates differently. However, we can say that even if you match with a lender who requires a credit check, it’s not the end of the world. Your lender may conduct their assessment on the full scope of your circumstances. If you manage your job, income and expenses, and debts well, your lender might overlook your credit.
If you feel you need someone to take a chance on you, why not see how the lenders in the Monzi lender-finder network can help?
Centrelink Cash advance as an alternative
An excellent alternative to using pay on-demand or taking a loan is a cash advance from Centrelink. This may not be an option for everyone, as not everyone qualifies for Centrelink payments. However, if you do qualify or are already receiving a payment of some description, you may be eligible for a cash advance. This means that you could potentially receive a bit of your upcoming payment in advance, just as you would via a pay on-demand provider.
This isn’t available for all Centrelink customers; some payments don’t allow for a cash advance given their nature. However, a Centrelink cash advance is interest-free and valuable for events such as preparing for Christmas. However, just because you are a Centrelink customer doesn’t mean you cannot qualify for a personal loan. Loans for people on Centrelink are available via some of the Monzi lenders. This will depend on whether you can make your personal loan repayments and maintain yourself and your family, however.
Using a credit card as an alternative
If you aren’t eligible for Centrelink repayments, a different alternative to pay on-demand is using a credit card. You can use your credit card either directly at the checkout to cover large shopping bills. Or, you can open a line of credit (cash advance) at an ATM that will allow you to withdraw cash loans and spend it on whatever you like.
However, the most obvious downside to using credit cards is that the interest can be pretty high. It may not be the best idea to start using your credit card when you are short on money if you don’t do so often. Likewise, if you find yourself tight on cash, it’s probably not the best idea to open a credit account. However, If you are already quite versed with your credit card and use it for its rewards points, this can be a viable option for you. Remember that using a credit card is still borrowing money, and you will have to be prompt with your repayments to avoid paying the consequences.
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.
The pros and cons of pay on-demand
As with any financial decision, there are usually accompanying pros and cons. It is no different when it comes to the concept of accessing your pay early. Luckily, for this topic and with most providers, the pros do outweigh the cons:
The most obvious pro to pay on-demand is that you can access some extra cash without taking a traditional loan. You can also have this money in your debit account almost instantly whenever you request it. This is also an excellent way to avoid having to pay interest on this ‘borrowed’ sum.
As for cons, however, you may encounter a situation that needs more money than your pay on-demand provider will allow you to borrow. This may leave you owing multiple locations if you also have to take a loan. Alternatively, there may be some sneaky additional fees you didn’t consider before using pay on-demand. Meaning that whilst you are still using your money, your provider essentially keeps a portion of it in fees.
On-demand pay for the unemployed
Pay on-demand, naturally, has another catch. If you don’t have a job, you won’t be able to use such a service. This is because the whole concept of accessing your pay early is that you receive a paycheck from your employer, which your provider repays the loan with. If there’s no income coming in, you aren’t viable for the service.
Generally speaking, however, if you are unemployed, you are most likely receiving a Centrelink paycheck. This means that you could alternatively be eligible for a Centrelink cash advance. If you don’t qualify for this either, the government does offer a limited amount of interest-free loans that you can potentially turn to.
Can pensioners use pay on-demand?
Typically, if you receive the pension, you will be unlikely to be eligible for pay on-demand. Most of these providers will not work with you if more than 50% of your income is government or Centrelink benefits.
You may also need to meet a weekly earnings threshold (after-tax). This ensures that you have the adequate funds to use the service and maintain your financial wellbeing in other areas simultaneously. Again, if you are in this position, consider looking into the Centrelink cash advance or a no-interest government loan instead.
How frequently can you be paid as an employee?
When evaluating your application/income, the main questions your provider may ask you when considering your application/income is how often you get paid and how much. Generally, how often an employee is paid depends on when the company chooses payday to be. The most common pay intervals are weekly, fortnightly, and monthly. However, in some cases, you could be paid daily. This is more likely if you work for a private company and only do casual work. Therefore, you may end up being paid after jobs.
Regardless of when you receive your paycheck, if you can open an account with a pay on-demand provider, you will have the opportunity to access your pay almost whenever you like.
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.
What’s the difference between on-demand pay and BNPL’s?
Aside from pay on-demand, another popular way of covering the cost of your spending is through buy now pay later services (BNPL’s). Some of the best pay later services work to break up the total cost of whatever you are looking to purchase into four equal payments. This way, if you need something but cannot currently afford to pay for it, you can pay in instalments. Conversely, a pay on-demand service simply allows you to pull the money you need to cover the total cost.
Where the two differ, however, is with additional costs. Buy now pay later Australia is likely to feature interest, late fees, maintenance fees, and transaction fees. Meaning that your total cost may end up exceeding expectations.
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.
Can Monzi help with pay on-demand?
Monzi doesn’t offer a specific pay on-demand service. However, if you are strapped for cash and need a helping hand, we’re here to aid you.
The Monzi process is quick and easy, designed to find you a lender who may be able to help in as little as 60 minutes. Whether you need small loans or large loans, Monzi wants to help. So, if you are ready to start an application, all you have to do is click ‘apply now’ or scroll up to our loan slider at the top of the page. From there, tell us a little about you, and the rest is over to us.
If you have any questions before starting your application, however, don’t hesitate to contact us. You can reach a member of our friendly team at firstname.lastname@example.org. We look forward to hearing from you!
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