This comes as Aussies are increasingly turning to credit to tackle high inflation and combat rising cost of living pressures.

Insights from NAB revealed payday loans were the third most common type of debt used to manage financial hardship in the September quarter, trailing credit cards and borrowing from friends and family. 

Further, payday loans are considered the most stress-inducing at 64.2 points ahead of loans from family and friends at 57.3 points, personal loans at 51.9 points and home loans at 51.7 points. 

For reference, NAB’s data details a score closer to 0 indicates lower financial stress. 

In the lead up to Christmas, NAB Head of Customer Vulnerability Mike Chambers warned against the use of payday loans to manage the extra expenses people may be facing.

“Christmas can be a financially stressful time for many people and when faced with financial stress it can be tempting to try and find a quick fix to manage costs,” Mr Chambers said.

Data from Roy Morgan published last month, revealed Aussies are expected to continue to open their wallets, forecast to spend $63.9 billion in the pre-Christmas sales period from 14 November to 24 December.

Mr Chambers said payday loans can seem an attractive option, as they are often instant and have low credit controls in place, making them more accessible to people in desperate situations.

“What people don’t realise is there are often many hidden costs associated with the loans, on top of higher interest and late payment fees,” he said.

This warning comes despite NAB detailing Australians are owing on average $6,200 on payday loans in the last three months.

Further, NAB pushed ignition earlier this month on a new buy now, pay later product dubbed ‘NAB Now Pay Later’ to tap into the market amid the push for credit in the lead up to Christmas. 

Zip co-founder and global chief operating officer Peter Gray recently told he expects to see customers continue to turn to credit and credit cards in times of high inflation and increased cost of living.

“Those who utilise this form of credit and continue to extend their debt by only paying the minimum repayments, will continue to incur enormous interest bills, increasing the amount they owe, and the time required to pay it back,” Mr Gray said.


In the market for a personal loan? The table below features secured personal loans with some of the lowest interest rates on the market.


FixedUnsecuredN/AN/AMore details

Plenti Unsecured Personal Loan (Excellent Credit)

    FixedSecuredN/AN/AMore details

    Secured Personal Loan Fixed

      FixedSecuredN/AMore details

      Secured Personal Loan Fixed

        FixedSecuredN/AN/AMore details

        Secured Personal Loan

          FixedSecuredN/AMore details

          Fixed Secured Personal Loan

            VariableUnsecuredN/AN/AMore details

            Plenti Unsecured Personal Loan (Variable) (Excellent Credit)

              Important Information and Comparison Rate Warning

              All products with a link to a product provider’s website have a commercial marketing relationship between us and these providers. These products may appear prominently and first within the search tables regardless of their attributes and may include products marked as promoted, featured or sponsored. The link to a product provider’s website will allow you to get more information or apply for the product. By de-selecting “Show online partners only” additional non-commercialised products may be displayed and re-sorted at the top of the table. For more information on how we’ve selected these “Sponsored”, “Featured” and “Promoted” products, the products we compare, how we make money, and other important information about our service, please click here.

              The comparison rates in this table are based on a loan of $30,000 and a term of 5 years unless indicated otherwise. The comparison rates are for unsecured personal loans only for the relevant amounts and terms. The comparison rates for car loans and secured personal loans are for secured loans unless indicated otherwise. WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. Comparison rates are not calculated for revolving credit products.

              Monthly repayment figures are estimates only, exclude fees and are based on the advertised rate for the term and for the loan amount entered. Actual repayments will depend on your individual circumstances and interest rate changes. Rates correct as of July 13, 2024. View disclaimer.

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