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s WARNING: Do you really need a loan today?*

It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.


Check your options before you borrow:

  • For information about other options for managing bills and debts, call 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor.
  • Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan.
  • If you are on government benefits, ask if you can receive an advance from Centrelink: www.humanservices.gov.au/advancepayments

The Australian Government’s MoneySmart website shows you how small amount loans work and suggests other options that may help you.

*This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009

HOW DO I GET A LOAN WITH BAD CREDIT?

Do you want to get out of the cycle of debt and get a loan that will be beneficial, even though you have bad credit history?

To do this you need to do some research and find a lender that can see past your credit score without gauging you with exorbitant fees.

So how do you get a loan when you have bad credit?

The one main pre-requisite to getting a loan is to ensure you are receiving regular income so you can prove that you will be able to repay the loan.

You can’t wave a magic wand and make all your bad credit problems go away. Most often those who have debt problems often have bad financial habits that need to be addressed and moulded into healthy financial habits.

This can all have a snowball effect and some people can find themselves in financial stress very quickly.

A bad credit history can effect your ability to get a good interest rate on your next loan, therefore you will likely see higher interest rates than those with good credit (sometimes up to 20%) which puts you behind the eight ball before you even start to repay your loan!

You may be asked to offer collateral or assets to secure your loan until you can improve your credit history.

If you can hold off from getting another loan and spend some time improving your credit rating so that you can get a better interest rate and deal in the future then that is ideal!

However if you can’t hold off you should look for a lender who can offer you some breathing room to pay back your loan and help improve your credit rating.

bad-credit

HOW DO I IMPROVE MY CREDIT RATING?

Your credit score or rating is what lenders use to decide if you are a risky customer or if you are a good credit risk.

Unfortunately many people find themselves surprised when they are told they have a bad credit rating.

There are so many things that can factor in when trying to decipher why you have a bad credit loan rating.

You can receive a bad credit rating by failing to:

  • Make payments or bills on time.
  • How you repay your credit cards, are they always maxed out or paid monthly?
  • Have you defaulted on any payments?
  • If you have any serious credit infringements.

If you are wanting to improve your bad credit report then you should be:

  • Ensuring that your repayments are made on time.
  • You settle any debts that are owing.
  • Ensure your household bills are paid on time (Phone and electricity companies can make entry’s on your credit rating if you are constantly paying your bills late).
  • Always ensure your lender is updated when you move house so as they can get bills and statements to you.

Another way to get a loan with bad credit is to get a secured loan, you can do this by using an asset to secure your loan to. This will get you a much better interest rate and deal than an unsecured loan.

However the downside is if you fail to meet the repayments the lender is within their rights to sell the collateral that you have secured the loan to. This way they can recoup their loan costs.

Therefore, the best way to get a good loan deal is to put in the time and develop healthy financial habits that will improve your credit rating!