Bad Credit Loans

Even a bad credit score won’t stop you from getting approved for a loan. Learn about your options across a range of finance types with Savvy.

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Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on August 18th, 2023       

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At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

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Written by 
Savvy Editorial Team
Savvy's content writing team are professionals with a wide and diverse range of industry experience and topic knowledge. We write across a broad spectrum of finance-related topics to provide our readers with informative resources to help them learn more about a certain area or enable them to decide on which product is best for their needs with careful comparison. Meet the team behind the operation here. Visit our authors page to meet Savvy's expert writing team, committed to delivering informative and engaging content to help you make informed financial decisions.
Our authors
, updated on August 18th, 2023       

Fact checked

At Savvy, we are committed to providing accurate information. Our content undergoes a rigorous process of fact-checking before it is published. Learn more about our editorial policy.

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.

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Why Savvy can help you find your ideal bad credit loan

More about bad credit loans

What are bad credit loans and how do they work?

As the name suggests, bad credit loans are a type of finance designed to suit the needs of borrowers who have struggled with their credit score in the past. These loans are offered by specialist lenders with different restrictions compared to standard finance agreements and provide those who find themselves with a compromised credit score with a financing option not available with traditional lenders. These days, not all hope is necessarily lost if you don’t meet standard financier requirements regarding your credit file.

Firstly, and most importantly, these loans are offered with higher interest rates and fees than those for borrowers with good to great credit scores. This is the case because interest rates are set in large part based on risk, meaning that if your lender believes you to be at greater risk of defaulting or struggling with your repayments down the track.

The second major difference between standard and bad credit loans is the greater restriction on borrowing. Because bad credit borrowers are seen as posing a greater risk of default, lenders are generally unwilling to approve loans as large as those for applicants with a strong credit history. This means that while there’s no theoretical maximum amount when it comes to car loans (dictated by the value of the car and your borrowing capacity), the absolute maximum you may be approved for is $100,000 with bad credit (though it’s usually less).

Aside from these factors, though, the function of your loan is no different: you’ll still receive a lump sum which you’ll repay in instalments over a period as agreed in your loan contract. Above all else, they can open doors for you if you’ve struggled with your credit. You can get the financing process started by applying through Savvy today for your chosen loan type.

How do I get approved for a bad credit loan with Savvy?

The process of applying and getting approved for bad credit finance will vary depending on the type of loan you’re after. For instance, the application process for car or leisure finance is different from personal and small loans. As such, it’s important to familiarise yourself with the process for the type of loan you’re looking for.

Below is the application process for a bad credit car loan with Savvy as an example (which is very similar to those for commercial and leisure finance).

  1. Fill out our online application form: our simple form helps us find out about you, the type of loan you’re after and your financial situation, including the nature of your credit history. By completing this application, your consultant can get to work searching for any suitable options among our panel of lenders.
  2. Supply any required supporting documents: as part of this process, you may be required to submit some further documentation to help us confirm your income and employment. This can be done online via our portal, which will also enable you to electronically sign other documents such as your consent form.
  3. Speak with your consultant about your options: once your consultant has considered the loans available among our panel, they’ll give you a call to discuss your situation and what the best offers may be in terms of their cost and suitability. They can also provide you with an indicative interest rate. From there, you can give them the go-ahead to prepare your application for formal approval.
  4. Have your loan approved, settled and drive away: formal approval can take as little as one business day, after which we’ll handle the settlement process once everything is signed. From there, you’ll be the owner of your new car, so you can drive away!

How to increase your chances of approval for a bad credit loan

Common bad credit loan questions

Can I get approved for a loan if I’m on Centrelink?

There are specialist lenders across all finance types who can accept Centrelink payments as part of your assessable income. It’s important to know which payments can be accepted in your loan application, which include the following:

  • Aged pension
  • Disability pension
  • Veterans’ Affairs pension
  • Family Tax Benefits A and B
  • Single parent payments
  • Carer payments
  • JobSeeker (as a low income supplement)
Is pre-approval still available for bad credit finance?

Yes – you can still be pre-approved for finance even if the product you’re applying for is designed for borrowers with bad credit. This will help you gain a clear understanding of how much you’re eligible to borrow, which can help you if you’re using the pre-approval to negotiate on the price of a particular item or asset.

Will I be able to refinance to a better loan if my credit score improves?

Borrowers can look to refinance their loans down the track if they’ve kept up with repayments and their credit score has improved to potentially take advantage of a better deal and lower rates. While this isn’t really an option for small loans, you can refinance just about any other loan deal. However, you’ll need to consider any early exit costs associated with doing so.

How long will it take me to get approved?

Having bad credit and applying to a specialist lender may not impact the approval time for your loan as much as you might expect. However, this depends entirely on the type of loan you apply for. A small loan or personal loan can be approved and funded as soon as the same day you apply and car loans can take as few as two days, but a larger loan like a mortgage is likely to take weeks or months to complete, especially with a complex financial profile.

Will I be able to take out a loan if I’m under a Part IX debt agreement?

There are lenders operating in the market who can approve applications from individuals under a Part IX debt agreement. It’s important to note, though, that you’ll stand a far greater chance of approval for your loan if you wait until your agreement has been completed, as more lenders will be able to help you.

Can I be approved with unpaid defaults on my file?

Lenders who work with customers who have an imperfect credit record can often look past unpaid defaults and are able to approve your application. Like a Part IX debt agreement, though, you’ll boost your chances of approval if you pay off your existing defaults before you apply, as your outstanding debt will be lower and your borrowing power will be increased overall.

How soon after being discharged from bankruptcy can I apply for my loan?

You can apply for finance from the day after you’re discharged from bankruptcy. Unlike Part IX debt agreements, bankruptcies won’t allow you to apply whilst hanging over your head, so you’ll be required to wait until your commitments are completed before applying for credit with a lender.

Can I get guaranteed approval on my loan with any lenders in Australia?

No – all lenders are required to do their due diligence when assessing applications to determine whether the individual or couple is able to comfortably take on and repay the proposed loan. In that way, there is always an element of oversight from the lender which prevents guaranteed approval in any form.

Will applying for a joint bad credit loan help my chances of approval?

Adding a second borrower to a loan agreement, such as a joint personal loan, may help your approval chances, as lenders will be relying on two incomes instead of just one. However, whether you’re approved will ultimately depend on each of your borrowing profiles and how your lender assesses them.