How To Get A Loan With Bad Credit In Australia

This article will give you the correct information on how bad credit loans work in Australia, the requirements to get a loan with bad credit, the minimum credit score for a loan in Australia, the 7 best personal loans with bad credit in Australia and more.

Bad credit loans aren’t only designed for individuals with less than desirable credit – they are also handy for individuals with little to no credit history. Without an established credit history, banks can be hesitant to grant loans to people.

Financial companies undertake a credit history check to determine whether a person is eligible to take out a personal loan with them. The way the financial companies people’s eligibility is by completing a credit check.


  • You will learn how loans with bad credit work in Australia
  • The requirement to get loans with bad credit 
  • How to get a loan and the minimum credit score for a loan in Australia
  • The 7 best personal loans for bad credits in Australia and answers to some frequently asked questions
How To Get A Loan With Bad Credit In Australia

How loans with bad credit work in Australia

A bad credit loan is for individuals whose credit score isn’t high or good enough to receive a loan from a traditional financial institution.

Bad credit loans work the same way as personal loans. People borrow money from these lenders and pay the loan back in fixed monthly instalments. People can get a traditional personal loan from a credit union, bank or online lender.

However, credit unions and banks often have stringent credit score standards in place for people. These entities will review people’s credit history to determine if they qualify for a loan and the cost of the loan.

Many financial institutions will require an excellent or a good credit score to qualify for a personal loan and will offer lower interest rates to these people. Applicants’ requirements might differ depending on the lender and people’s creditworthiness.

Because bad credit loans are for an individual with a limited or poor credit history, they come with restrictions, such as long waits for loan approvals, rigorous monthly payment terms, higher interest rates, and other additional fees and penalties.

Bad credit is instalment loans paid over time with a specific number of regularly scheduled payments. An instalment loan is like an auto loan or a fixed-rate mortgage.

Requirements to get a loan with bad credit in Australia

Below are the necessary requirements to get a loan with bad credit in Australia

  • Be currently employed for six (6) months or have been self-employed for a minimum of 1 year.
  • Individuals must earn an income of $45,000 or more.
  • Individuals must be over the age of 18.
  • individual must be a permanent Australian Resident or Citizen.

The minimum credit score for a loan in Australia

A credit score below 600 is considered below average – fair, while a credit score between 550 and 624 is regarded as adequate for most lenders. A score between 300 and 549 might impact the number of lenders willing to provide people with a loan.

How to get a loan with bad credit in Australia

Below is a list of how to get a loan with bad credit in Australia

  • Review credit report

After running a good credit check to learn their credit score, people will have a starting point to find a potential lender that will match their credit history.

  • Explore/Compare lender options

People should always compare loan terms online, which will help them find the best personal loan lender. Sometimes, most lenders prequalify borrowers to give them an idea of whether they qualify for a loan or the terms available to them. Prequalifying for a loan won’t typically impact your credit score.

  • Collect application information

Some lenders will require the following if people apply for a loan: their annual income, the name of their employer and the length of time they have worked there, their Social Security number, their debt-to-income ratio, a summary of their household expenses, and if they rent or own a home.

  • Apply for the loan

After people have identified the loan that seems like the best fit for them, it’s time for them to apply — but it’s better to start with just one loan application. It’s a good practice to apply for one loan at a time.

Applying for too many loans at once in a short period can reduce people’s credit scores, decreasing their chances of receiving approval for the loan and increasing their interest rates.

7 best personal loans for bad credit in Australia

Below are the best personal loans for bad to excellent credit in Australia.

1. platform impressed the public with its competitive pricing and straightforward green car loan. The loan rewards customers with excellent to good credit with low fixed rates.

The platform also offers special lower rates for homeowners. People can borrow $5000 – $100,000 with loan terms between 3-5 years. features

  • The platform has excellent customer service
  • Seamless, effortless, and quick to respond
  • Offers competitive interest rates
  • Easy and quick to apply

2. Heritage Bank Standard 

The platform loan allows people to select a fixed or variable interest rate based on their credit rating and financial situation. People can borrow between $5000 – $25,000 with terms up to 7 years. Plus, people can choose to make their repayments weekly, fortnightly or monthly. 

Heritage Bank Standard features

  • Excellent customer service
  • Offers the best competitive rates
  • Seamless and quick to respond to clients
  • No payment of ongoing fees

3. NOW Finance

With fixed interest rates on the platform starting at 6.75 percentage, online lender Now Finance is a top choice for people with both excellent and low credit looking to borrow between $5,000 – $50,000.

NOW Finance features

  • Quick and easy to deal with
  • Fast loan approval
  • Flexible repayments
  • Zero fees

4. OurMoneyMarket

The platform (OurMoneyMarket) car loan can help cover the cost of a used car from $2,001 – $75,000. The loan comes with fixed interest rates starting at a low 56.25 percentage and offers loan terms from 1 – 7 years. 

OurMoneyMarket features

  • Fast online application
  • No ongoing fees
  • Early and extra repayment
  • It offers a range of lenders

5. ING 

ING platform won Excellent Customer Service and Outstanding Customer Satisfaction awards in the 2022 People’s Choice Awards. The interest rate on the ING Loan is fixed from 6.99 percent to 10.99 percent based on a credit assessment and has terms from 2 – 7 years. 

ING features

  • Offers fixed interest rates
  • Fixed loan term
  • No ongoing fees
  • Offers flexible repayment options
  • Fast access to funds

6. Wisr 

The Wisr platform online application is quite fast; people can get a response within minutes and funds within 2 days following approval. Interest rates start at 8.20 percent for people with excellent credit.

Loan terms range from 3 to 5-year terms with a maximum borrowed amount of $64,000. There is a $595 establishment fee, but the fee may be waived for eligible customers, borrowing between $30,001 – $64,000.

Wisr features

  • Personalized rates
  • Offers fixed rates
  • Varying loan terms
  • No ongoing or repayment fees

7. Handypay

The platform is a specialist home improvement plan provider offering loans for people with excellent – fair credit, which they can use for a range of green home initiatives such as rainwater tanks, solar panels, batteries or energy-efficient renovations. ​​

Rates start from an introductory rate of 6.99 percent based on the loan amount and term length. The platform has a $250 application fee, but the loan doesn’t have any monthly or ongoing account fees.

The platform allows extra repayments, but it’s essential to know that a redraw facility is not available.

Handypay features

  • Quick application
  • Offers flexible terms
  • Varying loan amount
  • Offers fixed rates
  • No ongoing fees

How a bad credit loan help to improve your life

Credit scores play a big role in people’s financial life. Credit scores help lenders decide whether a person is a good risk. People’s credit score can mean approval or denial of a loan. It can factor into how much people are charged in interest, making the debt more or less expensive.

Read Also:

10 Best Direct Loan Lenders For Poor Credit With Guaranteed Approvals

How To Get A Loan When You Are On Benefits

How To Calculate Payment On A Loan – An Easy Guide


Bad credit loans are used to improve credit history–especially for a person don’t have an extensive amount of credit history. People should select an affordable loan and apply with a lender that reports payments to the major credit bureaus.

If a person borrows a bad credit loan from a lender that reports their payments to credit bureaus and pays on time, it will positively impact their credit report. It’s essential to make payments earlier to prevent negative reporting for making late payments.


Is it possible to get a loan with bad credit?

It’s very possible to get a personal loan with bad credit. However, people must shop around to find the best options. Most lenders target subprime borrowers, but their loan products often cost more. Secured loans are also an option, but people risk losing their assets if they encounter financial hardship.

Can you get Finance with bad credit in Australia?

In most cases, Australian banks will require a score of 700 and above to approve a personal loan or a credit card. If people’s rating is lower than 700, the bank may consider the person “high risk”.

You can learn more from the video below:

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