Bad credit? Don’t sweat it
Get approved for your loan with bad credit
If you’re saddled with a bad credit score, it’s important to know that you’re far from alone: hundreds of thousands of Australians find themselves in that very position. While it hasn’t always been the case, there are more specialist lending options today than ever before when it comes to financing loan applications from those with imperfect credit histories. Just because you have bad credit doesn’t mean you can’t be approved for the loan you need to help you achieve your financial goals.
Let Savvy help you out
We understand that bad credit can happen for a myriad of reasons and believe that Australians in this position deserve a second chance at financing. Because of this, we’ve built partnerships with lenders across a variety of finance types to help you find your ideal loan. Whether you’re in the market for your next car, a new home or miscellaneous funds for your personal needs, you can compare your options here and start the application process today.
Why Savvy can help you find your ideal bad credit loan
Our range of bad credit loan options
Bad credit doesn’t need to be a roadblock for your car loan application. You can apply with Savvy today and be connected with one of our specialist partners through your dedicated consultant, all in as little as 48 hours.
If you’re looking to take your holiday to the next level by purchasing a caravan, boat, jet-ski or anything else, you can get approved through Savvy. Our consultants work around the clock to have your applications turned around fast.
Whether you’re just starting up a new business or continuing to run your existing one with a less than perfect credit score, you can still access the financing you need to purchase or lease commercial assets like vehicles and equipment.
Even with a loan as large as a mortgage, there are lenders operating in the market who can help make your home purchase dream a reality. Start comparing from flexible lender options to get the ball rolling on your application.
Personal loans can be used for just about anything you like, from funding your wedding, holiday or consolidating existing debts (as well as everything in between). Compare offers with Savvy and get funded within just 24 hours.
Otherwise known as cash loans, this type of finance is designed for smaller investments up to $5,000 and shorter repayment terms. Your credit score will take a back seat to your ability to repay your loan, so you can be funded in just 60 minutes.
More about bad credit loans
How are bad credit loans different to other finance offers?
There are a few key areas where bad credit loans generally differ from those designed for customers with a strong record in terms of their credit history. The two most important factors which are impacted by bad credit are your borrowing power and the cost of interest and fees.
Because borrowers who’ve struggled with their credit score in recent years are seen as a greater risk of defaulting, lenders are less likely to offer significant amounts on their loans. This is especially the case for unsecured loans such as personal or business finance, which may only be obtainable for up to around $10,000 and $30,000 respectively with bad credit. It’s useful to approach the process with this in mind, as you can potentially avoid delays in the process brought about by applying for too much.
However, secured finance such as car loans can, in some cases, enable borrowers without a strong credit history to be approved for larger loans up to the maximum value of the asset. Home loans can also be taken out with a specialist lender for larger amounts due to the nature of the loan’s security (property) being highly valuable and often able to be resold easily.
Interest and fees
Part of the risk mitigation taken on by specialist lenders in this position comes in the form of increased interest rates and fees. These are charged as a result of the greater risk taken on by lending to an unproven borrower or one who has struggled with repayments in the past. It’s important to try to secure the lowest rates and fees available, and there are many ways to boost your chances of approval for a lower rate, but you’ll need to enter this process aware of the fact that your loan will cost more than those generally offered to borrowers with good credit.
How can I increase my chances of approval for a bad credit loan?
There are several ways you can go about maximising the likelihood of approval for your loan application. It’s important to do some or all of these, depending on the type of loan you’re applying for. These include:
Show positive recent credit behaviour
Even with very bad credit, taking steps to start increasing your credit score will boost your chances of being approved for the loan you’re after. One of these is continuing to pay your bills and other liabilities such as loans in a timely manner. Doing so will help your credit score grow and fill your credit file with positive recording in the weeks and months leading up to your application.
Pay off outstanding debts
The less debt you have outstanding, the greater your chances of approval. Each debt, such as outstanding loans or credit cards yet to be repaid, will impact your ability to borrow, as they come with monthly commitments to contribute instalments. By paying them down, you’re not only removing that roadblock but also showing lenders you’re capable of promptly paying your debts.
Save up a deposit
Displaying savings will also increase a lender’s confidence in you as a borrower. This is because you’re showing financial discipline in being able to set money aside and save up over an extended period. On top of this, a deposit reduces the required loan amount, which in turn cuts down on the potential risk taken on by your lender. Of course, deposits are required for home loans, so saving up a larger deposit in this case can help you get approved and potentially save you a significant amount.
Lower your credit limits
With lower limits on your credit cards, you decrease the amount of overall unsecured debt you’re exposed to. Even if you don’t have any debts outstanding on your credit card, it can be impacted by a high limit. By reducing your limit, you can improve your chances of receiving the green light on your application from your chosen lender.
Try to avoid job and address changes
Lenders want to see stability in your life, as this suggests changes to your income and expenses are more minimal and thus reduce the risk of becoming overwhelmed by your loan repayments. Staying in the same job for an extended period and trying to stick to the same address in the months and years leading up to your application can make a big difference (particularly when applying for a home loan).