A payday loan is a small short-term loan, usually of two to four weeks duration, designed to help meet unexpected expenses. A payday loan is a convenient and economical solution to meet temporary cash flow problems, but it is not suited for long-term or continuing financial needs.
A micro-loan is a loan that has a slightly longer duration, averaging between 3-12 months, and for amounts of $500 or more. These loans are generally used to meet larger expenses such as replacing whitegoods, car registration, rental bonds, dental expenses and unexpected travel.
Reputable lenders such as members of the National Financial Services Federation do not lend to customers without first reviewing their budget, confirming they have sufficient disposable income to service a loan, and then agreeing an appropriate amount and timeframe that meets their needs.
If you have ongoing problems meeting your financial needs or debt obligations, you should first talk to your credit provider before consulting with a financial adviser or credit counsellor.