Many people searching for short term loans are trying to solve an immediate financial need. Others may actually need a larger loan with more structured repayments. Understanding the difference between these options can help you choose a product that better fits your situation.

This page provides general information about how short term loans and personal loans work in Australia, and how they differ.

Short-term loans can be expensive and may not be suitable for everyone. Borrow only what you need and can afford to repay.

Loans are subject to assessment, eligibility criteria and approval.

What are short term loans?

In Australia, short term loans generally refer to regulated credit products known as:

Small Amount Credit Contracts (SACC)

• Loan amounts: $500 to $2,000
• Loan terms: 5 to 39 weeks
• Cost structure: establishment fee plus monthly fee
• No interest is charged

Medium Amount Credit Contracts (MACC)

• Loan amounts: $2,001 to $5,000
• Loan terms: 9 to 39 weeks
• Cost structure: establishment fee plus interest charges

These products are designed for short-term, one-off expenses, rather than ongoing financial needs.

What are personal loans?

Personal loans are a different category of credit product and are not considered short term loans.

At Fundo, personal loans generally:

• Range from $5,000 to $10,000
• Are repaid over longer, structured terms
• Have fixed repayments over time

They are typically used for larger or planned expenses, rather than immediate short-term gaps.

Key differences at a glance

Which option might suit your situation?

Short term loans may be considered if:

• The expense is unexpected and one-off
• You need a smaller amount
• You can repay within a short timeframe
• Repayments fit comfortably within your budget

Personal loans may be considered if:

• The expense is larger or planned
• You need more time to repay
• You prefer structured repayments over a longer period

How applications are assessed

All licensed lenders in Australia are required to assess whether a loan is suitable before approval.

This typically involves reviewing:

• Income from all sources
• Regular living expenses
• Existing financial commitments
• Recent banking activity
• Ability to meet repayments without financial hardship

If a loan appears likely to cause financial difficulty, the application may be declined.

Important considerations

Before applying for any loan, it is important to consider:

• The total cost of the loan
• Whether repayments are manageable alongside essential expenses
• Whether the expense is necessary and one-off
• Whether alternative options are available

Short term loans are generally not suitable for:

• Ongoing living expenses
• Debt consolidation
• Situations where you are already experiencing financial difficulty

Alternatives to consider

Before applying for credit, you may wish to explore:

• Payment arrangements with service providers
• Using available savings
• Government assistance
• Free financial counselling

You can contact the National Debt Helpline on 1800 007 007 for free, independent support.

Where Fundo fits

Fundo provides access to:

• Small Amount Credit Contracts ($500 to $2,000)
• Medium Amount Credit Contracts ($2,001 to $5,000)
• Personal Loans ($5,000 to $10,000)

The most appropriate option depends on your financial situation and what appears manageable based on assessment.