Some payday lenders are fully backed by banks while others only partially. There are also some payday lenders who operate without any funding from banks.
No. Banks in Australia do not offer payday loans. Some banks back payday lenders with extra credits that they can extend to public as payday loans.
In terms of loan recovery, payday lending is considered to be a high-risk affair. Payday loans are typically small and banks cannot afford to engage their resources at such small levels.
That’s why, banks choose to fund lenders instead of offering payday loans on their own.
It’s rather difficult to know whether a certain payday lender is backed by a bank or not. Banks typically refrain from making their associations with payday lenders public.
That said, it’s always the best idea to take a payday loan from a lender who has a solid industry reputation.
As mentioned earlier, banks do not make their associations with payday lenders public. So, it’s difficult to say whether payday lenders backed by banks offer lower interest rates or not.
A quick survey of interest rates offered by payday lenders can help you choose the most suitable option.
With a payday loan, you are dealing with a lender. As made clear earlier, banks do not offer or approve payday loans.