Experts say instant cash loan machines could leave low-income families in a debt trap.

The machines, which look like ATMs, are beginning to pop up in Australia.

They require simple identification and some bank details to approve users for immediate cash loans from $50 to $1,000. That limit is effectively increased by allowing users to access the machine numerous times.

Financial counsellors say the machines are popping up in low socio-economic areas, and could lead vulnerable people to make poor decisions.

NSW Financial Counsellors Association chair Graham Smith says disadvantaged communities should not be targeted.

He said his group has visited three of the machines in the Hunter region.

“There are two smoke shops, and in one shop there is one [machine], and in another shop there is two. Usually there is a queue out the door around Christmas time,” Mr Smith said.

“Unfortunately I think these machines are targeting the most vulnerable in our community, people on benefits who are looking at a way of getting some quick cash that I don't think they can afford in the long run.”

Mr Smith said quick loan schemes should always be approached with caution.

“It's an area of our society where people are struggling, and with electricity bills increasing, people have got less and less money, and going to one of these organisations and getting a loan can often be a deep financial trap,” he said.

The machines are regulated by ASIC under the same terms as payday lenders.

Plans to tighten the rules on payday lending - which disproportionately target the people least able to pay – are afoot.

A 2015 Commonwealth review led to draft reforms released last year, including a proposed cap on payments that could be made.

The Government is expecting to push forward with legislation this year, which would take effect 12 months after becoming law.