Bad Credit Personal Loans Australia
Having bad credit can make it harder to qualify for a personal loan, but it does not necessarily mean you have no borrowing options.
Bad credit personal loans are designed for borrowers whose credit history may include missed repayments, defaults, multiple credit enquiries or other financial difficulties. Depending on your current financial position, income and ability to make repayments, some specialist lenders may still consider your application.
At Realloans Australia, our personal loan brokers can assess your circumstances and help identify personal loan options that may be suitable for your financial position.
What Is a Bad Credit Personal Loan?
A bad credit personal loan is a type of personal loan available to borrowers who may not meet the credit requirements of traditional lenders.
Like a standard personal loan, you generally borrow a set amount and repay it over an agreed loan term through regular repayments. Depending on the lender and loan product, the loan may be secured or unsecured.
The main difference is how the lender assesses the application.
Applicants with a strong credit history may have access to a wider range of lenders, rates and loan products. If your credit history contains negative events, specialist lenders may place greater emphasis on your current circumstances, including your income, employment, existing debts, recent repayment behaviour and whether the proposed loan is affordable.
If you want to understand the broader options available before considering a bad credit product, you can also explore Realloans Australia’s Personal Loans options.
What Can Cause Bad Credit?
There is no single reason someone may have a poor credit history.
Your credit file may have been affected by:
- Missed or late loan repayments
- Unpaid bills or credit accounts
- Paid or unpaid defaults
- Multiple credit applications within a short period
- Financial hardship
- Previous loan or credit card problems
- Court judgments or other adverse credit events
- Previous financial difficulties caused by unemployment, illness or unexpected expenses.
Importantly, lenders do not necessarily treat every credit issue in the same way.
An older paid default may be assessed differently from a recent unpaid default. Similarly, one missed payment does not necessarily present the same lending risk as several recent credit problems.
This is why the circumstances behind your credit history can matter as much as simply being labelled as having “bad credit”.
Can I Get a Personal Loan With Bad Credit?
You may still be able to obtain a personal loan with bad credit, but approval will depend on the lender’s criteria and your individual financial circumstances.
A lender may consider:
- Your current income
- Employment stability
- Regular living expenses
- Existing loan and credit card repayments
- Recent bank account conduct
- The amount you want to borrow
- The purpose of the loan
- Previous defaults or missed repayments
- Whether previous defaults have been paid
- Recent credit applications
- Your overall ability to afford the new repayments.
Having a poor credit score does not automatically mean an application will be approved or declined.
This is one reason working with a Personal Loan Broker can be useful. Instead of looking only at a headline credit score, a broker can review the broader circumstances of the application and identify lenders whose policies may be better aligned with the borrower’s situation.
What Do Lenders Look at When You Have Bad Credit?
Your credit history
A lender may review the number, type, size and age of negative events appearing on your credit report.
For example, a lender may consider whether a default is paid or unpaid, how recently it occurred and whether there have been further repayment problems since then.
Your current income
Lenders need to determine whether your income is sufficient and reliable enough to support the proposed repayments.
Depending on your employment situation, this may involve reviewing payslips, bank statements, tax information or other acceptable evidence of income.
Your current debts and expenses
Existing personal loans, credit cards and other financial commitments can affect how much additional debt you can reasonably service.
Recent financial behaviour
Your recent financial position can be particularly important where older credit problems exist.
Demonstrating more stable income and consistent repayments may provide a lender with a clearer picture of your current circumstances.
What Documents May Be Required?
Requirements vary between lenders, but Realloans Australia notes that applicants may need to provide documentation such as:
- Payslips or other proof of income
- Recent bank statements
- Identification such as a driver’s licence or passport
- Proof of residential address
- Information about existing debts and financial commitments
- Details relating to previous defaults or credit problems.
Self-employed applicants or borrowers with less conventional income may need different supporting documentation depending on the lender.
Having the correct documents prepared can help a broker assess your application before approaching an appropriate lender.
Secured vs Unsecured Bad Credit Personal Loans
Secured personal loan
A secured loan uses an eligible asset as security for the finance.
Providing security can reduce the lender’s risk and may, depending on the lender and applicant, provide access to different lending options.
However, using an asset as security also creates an important risk: if you fail to meet your loan obligations, the lender may have rights over the secured asset.
Unsecured personal loan
An unsecured personal loan does not require an asset to be pledged as security.
This can offer more flexibility, but because the lender does not have an asset securing the debt, lending criteria and pricing may differ.
If the finance is specifically being used to purchase a vehicle, borrowers may also want to compare personal car loans or bad credit car loans rather than assuming a general unsecured personal loan is the most appropriate product.
Bad Credit Personal Loans vs Standard Personal Loans
| Feature | Standard Personal Loan | Bad Credit Personal Loan |
|---|---|---|
| Credit profile | Usually stronger | May include adverse credit history |
| Lender choice | Generally wider | May involve specialist lenders |
| Interest rates | Often lower for stronger applicants | Can be higher depending on risk |
| Assessment | Income, expenses and credit history | Greater focus may be placed on the complete financial situation |
| Loan amount | Depends on affordability and lender | May be more restricted |
| Security | Secured or unsecured options | Secured or unsecured options may be available |
| Approval | Subject to lender criteria | Subject to lender criteria |
How Does the Bad Credit Personal Loan Process Work?
The exact process varies depending on the lender, but an application through Realloans Australia may generally involve the following steps.
- 1
Discuss your circumstances
Provide information about the amount you want to borrow, the purpose of the loan, your income and your credit history.
- 2
Provide supporting documents
Your broker may request income documents, bank statements, identification and information about existing financial commitments.
- 3
Review potential lending options
Your circumstances can then be assessed against available lender policies, and suitable options can be discussed with you.
- 4
Submit the application
Once an appropriate option has been identified and you decide to proceed, you can apply for a personal loan and have the application submitted to the lender for formal assessment.
Approval is not guaranteed and remains subject to the lender’s lending criteria.
Why Choose Realloans Australia for Bad Credit Personal Loans?
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Qualified and Industry-Recognised Brokers
Realloans Australia’s brokers are ASIC-registered and members of recognised industry bodies including the Mortgage & Finance Association of Australia (MFAA), Finance Brokers Association of Australia (FBAA), and Commercial & Asset Finance Brokers Association (CAFBA). This gives borrowers added confidence that they are dealing with experienced finance professionals who understand lender requirements and responsible lending obligations.
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Access to 45+ Lenders
Realloans Australia works with a network of more than 45 lenders, including banks, non-bank lenders and specialist funders. This broader lender panel gives borrowers with bad credit access to more potential options, rather than relying on the lending criteria of a single institution. Your broker can compare available products based on your income, credit history and repayment capacity.
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30+ Years of Combined Finance Experience
With 30+ years of combined experience and 10,000+ clients helped, Realloans Australia assesses each application individually to identify suitable lending options based on the borrower’s circumstances.
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Personalised Support From Application to Settlement
Bad credit applications can require more explanation and supporting documentation than other loan applications. Realloans Australia’s brokers help borrowers understand their options, prepare the required paperwork and communicate with lenders throughout the process.
Ready To Get Started?
Bad credit can limit your borrowing options, but it does not always mean you cannot qualify for a personal loan. Your income, existing debts, repayment capacity and recent financial behaviour can all affect the outcome.
Realloans Australia can help assess your circumstances and identify lenders whose criteria may be suitable. Before proceeding, make sure you understand the interest rate, fees, repayment amount and total loan cost.
Frequently Asked Questions
Can I get a personal loan with bad credit in Australia?
Yes, some lenders consider applicants with poor credit histories. Approval depends on factors such as income, expenses, existing debts, recent repayment behaviour and the type and age of previous credit issues.
What credit score do I need for a bad credit personal loan?
There is no single score that guarantees approval. Different lenders use different criteria and may also consider your income, employment, existing commitments, repayment history and overall ability to afford the loan.
Can I get a personal loan if I have defaults?
Possibly. Some lenders may consider paid or unpaid defaults depending on their age, value and circumstances. Your recent financial behaviour and current repayment capacity will also usually influence the lender’s assessment.
Can I apply after being declined by a bank?
Yes, but it is worth understanding why the first application was declined before applying again. Different lenders have different criteria, so another lender may assess your circumstances differently.
Will applying for a personal loan affect my credit score?
A formal loan application can create a credit enquiry on your credit file. Multiple applications within a short period may affect how future lenders assess your overall credit profile.
Are bad credit personal loans more expensive?
They can be. Lenders may charge higher rates where they consider an application higher risk. Your actual rate will depend on your credit history, income, loan amount, term and security.
Can I get a secured or unsecured loan with bad credit?
Potentially, yes. Depending on the lender and your circumstances, secured and unsecured options may be available. The right structure will depend on your financial position, loan purpose and available products.