How to Get a Personal Loan with Bad Credit in Australia

If you have a history of paying bills late or have accrued a pile of debts, your credit score will probably be lower than you would like it to be. A history of poor credit can be an obstacle when it comes to gaining a lender’s confidence and you may assume a loan is out of your grasp – but if you have an emergency expense to pay, you can often get a personal loan without a credit check.

While it may not be as simple as if your credit was good, there are a few ways to achieve this, but first, you must look online for a loan provider who will offer you a personal loan without a credit check.

After you find one, here are five things to keep in mind:

Know Your Credit Score

First, ensure that you really do have bad credit and that no errors have caused your poor score. If you find a mistake, you should try to sort out the problem, as this will stay in your history if not rectified. You should also understand the reason for your bad credit rating before applying for a personal loan, so you know where you stand when approaching a potential loan provider.

Approach a Lender Openly

Use advantageous financial indicators such as your income and assets to prove your worthiness – most lenders use personal information, not included in your credit report, to determine whether you are a risky borrower. By doing this, they can get a good understanding of your financial position and are likely to offer personal loans with better terms.

Be Prepared         

Without a good credit history, you’ll need paperwork to substantiate your creditworthiness. Having the documents and records to illustrate the stability of your finances and support your credibility will help to increase your chances of approval. By law, credit providers need proof that you have the capacity to pay back any money they lend you, so get your documents and supporting evidence in order because you will be asked to supply the following:

  • A completed application, contract, and Direct Debit Request (provided by the lender)
  • Bank statements for the past 90 days up to your date of application for the loan
  • The most recent payslips issued by your employer

Be aware of dishonest loan sharks who prey on desperate consumers with poor credit scores. Make sure to find a reputable online lender who follows strict government regulations and ensure you understand the terms of the contract so you know exactly how much and when you will need to repay, before signing any documents. ‘Spondooli’ is a responsible and trusted lender in Australia with no hidden fees, and loans that can be paid out early without penalty. You can see how it works here. 

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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, talk to 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 – website: https://www.servicesaustralia.gov.au/individuals

The 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.