Low cost, fast cash loan program ‘Speckle’ launches

New low cost finance alternative by a not-for-profit and big bank partnership launches nationwide this week. 

Getting hit with a last-minute bill or landing an unexpected hospital visit can put extra pressure on household finances. But low cost loan program Speckle, is offering loans of up to $2,000 to help households manage financial shortfalls – and it has specifically targeted households that are susceptible to taking out high-fee credit.

Founded by not-for-profit Good Shepherd Microfinance and National Australia Bank (NAB), the program launches on February 6 and will be offered to households with an income of at least $30,000 – of which no more than 50% can be from benefits.

Developed after recent research has found that one in five households in Australia have used payday loans in the past three years, the program aims to create financial resilience and offer loans without hidden fees.

TODAY chatted to Effie Zahos from Money Magazine about the growing popularity of small loan programs and what to watch out for if you apply for one.

3 ways to stay on top of your finances

TODAY: There’s no doubt these type of small loans programs are gaining popularity?

EFFIE: They are definitely gaining in popularity, which is why — thank goodness –Good Shepherd Microfinance has come into this market. The market needs a disrupter and at 50% cheaper it’s interesting to see what these other guys do. There is a market for this, whether we like these products or not and banks aren’t stepping up — so someone stepping up and offering it 50% cheaper is a disrupter. These guys don’t have a budget like the other payday lenders.

TODAY: But you still have to be wary here don’t you?

EFFIE: Absolutely. This market needs more regulation. The Royal Banking Commission isn’t looking into these products but the government has put a paper in to see referral of reforms on small credit loans. You do have other options too, believe it or not Centrelink will pay you in advance on your Centrelink payments without interest. Energy bills and car payments are the biggest things people are getting when they get a pay day loan. Energy providers by law have to get a hardship so maybe approach them first before you go to these small loans.

However, Good Shepherd Microfinance CEO, Adam Mooney explained that Speckle has been created with the aim to improve financial well-being.

“We know that people need access to emergency cash to pay for household expenses like children’s needs, car repairs and other essential items. Speckle offers a low cost alternative for people who can afford to repay a cash loan of between $200-$2,000,” Chief Executive Officer of Good Shepherd Finance, Adam Mooney, said.

After February 6, Australians can apply online for their cash loan and will receive it typically in two days once a contract has been signed.

“Speckle is around half the cost of other short term cash loans because it’s been developed by a community organisation that is focused on improving financial wellbeing,” Mooney said. Good Shepherd Microfinance are also behind The No Interest Loan Scheme (NILS) which offers families on low incomes affordable access to credit.

“Our fees include a 10% establishment fee and 2% monthly fee compared to the market average of 20% and four%.”

A loan of $1,000 paid back over six months will typically cost you $1,220, according to the site’s online calculator.

As well as offering households affordable repayment options for these small cash loans, Speckle also provides budgeting strategies and directs customers to information about financial counselling.

* In highlighting particular offers we are not making specific recommendations as this article does not cover all available products and may not compare all features relevant to you. Any advice provided is general in nature and does not take account of your needs, objectives or financial situation. Individuals should consider their own circumstances, and if in doubt seek appropriate advice, before proceeding.

9Saver Partner offers RateCity low-interest personal loans