The Difference Between Risky & Smart Loans In Australia

When you need a quick loan, it’s easy to jump online and find a sea of options to choose from. The thing is, there are loads of loan options out there are designed for specific circumstances. When you’re on the hunt for a smart loan in Australia, it helps to know a few of the most crucial financial ground rules that’ll let you separate the good from the bad.

In this article, we’re going over some of the most important things you need to look for when you’re searching for the perfect loan option. These are the key things you need to ask yourself:

Do you need the money right now or can you wait?

There are two forms of loan, short-term and long-term. Long-term loans are the conventional personal loan format that are commonly offered by banks and well known financial institutions.

They take a bit longer to apply for, usually span over years into the future, and the interest rate you receive is based on your credit history. If you need the cash right away to solve a really urgent issue,  a long-term loan isn’t the best option for you.

Short-term loans are much faster. They are designed to be paid back within weeks or months of you receiving the money. These short-term solutions are usually referred to as payday loans. The best advantage of a payday loan is speed.

At Cigno Loans, we offer to make payment within 24 hours of your application being approved. Need the funds today or tomorrow? Then this is the way to go.

What’s your credit score like?

If you have an amazing credit score, you’ll be able to access options like overdrafts and credit cards. It’s important to remember that credit cards, overdrafts, and payday loans usually have a similar cost range in terms of interest rates and fees, so it’s worth doing some looking around to find the best offers.

If you have a poor credit score, you won’t have easy access to a lot of financial products or credit purchases. Payday loans traditionally don’t include a credit check. So even if your credit history is really bad, you’ll have no problem getting a short-term loan as long as you can prove you earn a stable income from work.

The most important thing any payday loan provider is going to want to check is your monthly salary. At Cigno, we do this by asking to see your most recent bank statements. If it looks like you can afford the loan comfortably, we’ll be happy to help.

What do you need the loan for?    

Need the money for a really urgent situation? Then taking a payday loan is completely justified. Want the money to plan a big holiday? Then you shouldn’t really be using short-term financial products to fund it.

There are loads of ways to handle holidays that don’t cost too much, but the amount you spend isn’t the only problem – your ability to pay back within the next month is just as vital. The thing to remember with payday loans is that they’re designed to help you get through tough times, not pay for luxury pleasures.

When you take a conventional personal loan or credit card, once you’re approved for the money, you can do what you like with the funds provided. With short-term loans however, we like to be far more careful that you’re using the cash for something you absolutely need.

If you tell us that you’re looking to buy a new accessory for your car or a new bag, we’ll be forced to advise that you have a very careful rethink of your intentions and this will mean delays.

Some of the most common reasons we provide our loans include:

  • To repair damages to the house that compromise your safety and well being.
  • Repairs to cars that are vital for your travel to work.
  • Food and necessities for the rest of the month.

That’s it! These are the main things you should be asking yourself when you’re looking for a smart loan in Australia. When you’re low on cash, and need a quick injection of funds to make it to your next payday, a short-term loan is your best bet. Have more time and want a larger amount of money to do something more special? Then you have the freedom to look for long-term personal loans from established providers.  

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Read more about bad payday loans here, or in our previous blog post: Why No Fuss Payday loans Are Rising In Popularity

Disclaimer: Please be aware that Cigno Loans’ articles do not replace advice from an accountant or financial advisor. All information provided is intended to be used as a guide only, as it does not take into account your personal financial situation or needs. If you require assistance, it is recommended that you consult a licensed financial or tax advisor.


Ordered by the Federal Court of Australia

The Federal Court of Australia has found that Cigno Australia Pty Ltd (Cigno Australia) and BSF Solutions Pty Ltd (BSF Solutions) have breached the law by engaging in unlicensed credit activity and charging prohibited fees.

In the period from July 2022 to 3 October 2023, over 100,000 consumers have been lent a total of $34 million, and charged fees of over $70 million, under the ‘No Upfront Charge Loan Model’ operated by BSF Solutions and Cigno Australia. At no time has either BSF Solutions or Cigno Australia held an Australian Credit Licence.

The Court also found that Mark Swanepoel (director of Cigno Australia) and Brenton James Harrison (director of BSF Solutions) were involved in these breaches of the law.

With effect from 24 May 2024, the Court has granted permanent injunctions preventing Cigno Australia and BSF Solutions from:

  • demanding, receiving or accepting fees or charges, including amounts of loan principal, from consumers in relation to credit provided under the ‘No Upfront Charge Model’; and
  • engaging in further credit activity pursuant to the ‘No Upfront Charge Loan Model’, including by entering into new agreements with consumers, for so long as they do not hold an Australian Credit Licence.

Cigno Australia was ordered by the Court to, by 5th July 2024, send written communications to consumers who between July 2022 and December 2022 entered into agreements with Cigno Australia and BSF Solutions under the ‘No Upfront Charge Loan Model’.

The Court will later determine whether (among other things) Cigno Australia and Mark Swanepoel ought to pay a pecuniary penalty in respect of this conduct, and whether Mark Swanepoel should be restrained from carrying on a business engaging in credit activity.

Cigno Australia, BSF Solutions, Mr Swanepoel and Mr Harrison intend to appeal the decision of the Court and have filed an application for leave to appeal. If the appeal is successful, some or all of the orders of the Federal Court of Australia may be set aside.

Where can you get more information?

Where to go for further support

You can access legal advice in your state at: Free legal advice –

If you are experiencing trouble with debt, or money worries in general, contact:

  • the National Debt Helpline on 1800 007 007 or online chat (9:30am to 4.30pm, Monday to Friday).

If you need someone to talk to, contact:

  • Lifeline on 13 11 14 (24 hours) or their crisis support online chat or
  • Beyond Blue on 1300 22 46 36 (24 hours) or their webchat