Bad Credit Car Loans

Need a second chance? Get Savvy on your side apply for a car loan today, even if you have bad credit.Top of Form

No obligation. It won't affect your credit score.
Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
Our authors
, updated on July 3rd, 2024       

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Bad credit car loans approved with Savvy

Bad credit is OK

Do you have a bad credit rating? Have your car loan applications been rejected by the banks? You deserve a second chance! At Savvy, we’re partnered with a wide range of reputable lenders to give you more options when it comes to financing your vehicle. Whether you’re a single parent, receiving Centrelink benefits or have defaults on your file, we can help you secure a bad credit car loan suited to your situation.

Our experienced consultants can help you maximise your chances of approval for your car loan and advise you on steps to take to improve your credit rating. With Savvy, you can be on your way to owning your car before you know it.

A trusted brand

We’ve been helping Australians from all walks of life finance their vehicle the right way for over a decade, with our 4.9-star Feefo rating representing the overwhelming satisfaction our customers feel throughout the process.

Get the wheels in motion on your second-chance car loan application by completing a free, no-obligation quote with us today to find out whether we can help you secure the finance you’re looking for.

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Why bad credit customers trust Savvy

Our bad credit car loans at a glance

How much can I borrow?

Our bad credit car loans start from $5,000 and can be approved up to as much as $100,000. However, the amount you’ll be able to borrow will depend on a variety of factors, which your Savvy consultant will run through with you. These include:

  • Your income and expenses: how much disposable income you have available; low income-earners won’t be able to borrow as much as higher earners.
  • Your repayment record: some lenders may trust borrowers with a verifiable record of repaying past loans with more money
  • The value of your car: the size of your loan will be dictated largely by the value of the vehicle
  • Your interest and fees: these will eat into your loan amount, so your borrowing power will be adjusted to include these
  • Your lender’s maximum amount: while some lenders may allow some borrowers to borrow up to $100,000, others may set this maximum at $75,000 or even $50,000
Do I need to make a deposit?

No – deposits aren’t a requirement on bad credit car loans. You can borrow up to 100% of your vehicle’s purchase price. However, paying a deposit will save you on interest throughout your repayment term and boost your chances of approval.

How long can I take to repay my bad credit car loan?

You can choose from flexible loan terms as short as one year in length and as long as seven with some lenders. However, whether you’re able to be approved for longer terms will depend on your eligibility and profile.

Can I be approved with no credit history?

Yes – provided you satisfy the required eligibility criteria set in place by your lender, you can still qualify for a loan without any prior credit or borrowing history.

How quickly can I be pre-approved?

Through our fast online application process, we can help you get a pre-approval as soon as the same day, so you can shop around for your car with peace of mind related to your budget.

What income can be accepted on my application?

You can include eligible earnings from full-time, part-time, casual or self-employed work, as well as any eligible Centrelink payments you receive, such as the following:

  • Aged pension
  • Disability support pension
  • Veterans’ pension
  • Single parent payment
  • Carers payment
  • Family Tax Benefits
What interest rates can I expect to receive on my bad credit car loan?

Bad credit car loan interest rates will generally be higher than those for borrowers with an average to good credit score. However, this doesn’t mean it isn’t still important to look around for the best loan available, which your Savvy consultant can help you do. We’ll consider offers from our partners specialising in bad credit loan products to find the most affordable rates and fees for you among our panel.

Can I buy a new or used car?

Whether you’re looking for a brand-new car from a dealer or find one from a private seller, we can help you access finance, source the car through our dealer network and deliver it to your door.

Can I get a loan as a discharged bankrupt?

Yes – we can also lend a hand to discharged bankrupts who are looking to take out a car loan and may not be able to access the financing they need through traditional sources.

Can I get approved with unpaid defaults?

Depending on the nature of the default, how long ago it was and how big it is, you may still be able to access a car loan with unpaid defaults. This may only be available for phone and utility defaults, rather than those on other loans or outstanding court judgments.

How to apply for a bad credit car loan with Savvy

Our Process

Fill out our online application form

Our car loan starts with an easy application form (which takes no more than ten minutes) to assess your profile and find the most suitable lenders for your individual situation.

Send through the required documents

We may require additional supporting documents to further process your application, such as bank statements, which you can submit via our online portal. You can also sign any relevant documents electronically.

Discuss your options with your consultant

Your personal consultant will call you within two hours of your application to discuss your car finance options. Once you’re happy with your choice, we can prepare your application for formal approval.

Sign your contract and drive away your new car

From there, you can expect to be formally approved within 24 hours. We'll organise settlement for you once you’ve signed off on the paperwork, after which you you’ll be able to drive away your new car!

Top tips to increase your chances of bad credit car loan approval

Further bad credit car loan questions answered

How long does the application process take?

The speed of your application will depend on a number of variables specific to your borrowing profile, such as your recent credit record, income, employment, the vehicle you wish to buy and more. We work with specialist lenders who can have applications approved and funded in as little as 48 hours.

Can I refinance a car loan with bad credit?

If you're repaying your bad credit car loan and your credit score has improved sufficiently across your loan term to date, you may be able to look around to refinance your car loan with other lenders. You’ll need to prove you’re in a better financial position than you were when you took out your loan in the first place, as well as show that you've been keeping up with your repayments consistently. One other way is to trade in your current vehicle and pay out the bad credit car loan in full, although this may cost you an early repayment fee to do so with some lenders. It's important to note that if your credit score isn't as strong as it was when you took out your loan, you can expect to pay more in interest after refinancing.

What is a Part IX debt agreement?

Part IX Debt agreement is a formalised, legally-binding agreement between yourself and your creditors to pay back debts.

Can I be guaranteed of bad credit car loan approval?

No – there is no such thing as guaranteed car loan approval in Australia. This is because lenders are required to observe responsible lending obligations, meaning they have to assess each application thoroughly and determine whether applicants are in a position to take on the loan they're asking for. You should steer clear of lenders offering guaranteed approvals, as they may not be complying with Australian law. All you can do is try to make yourself as appealing an applicant as possible, which will go a long way towards helping you get approved.

Are no credit check car loans available?

No – all lenders will conduct a credit check. You shouldn’t be too concerned about a credit check when you look at a bad credit car loan, as lenders are already anticipating a patchy credit history. There are limits to what lenders will accept, though, but there are many lenders that are very flexible when reviewing one’s credit file. When you speak with your consultant, they’ll review your file to make sure that you application is sent to the right financier. There may be some rent-to-own organisations that may not require a credit check, but all legitimate financiers will.

I’m self-employed. Can I get approved for a bad credit car loan?

Yes – you can be approved for car finance if you’re self-employed and have an imperfect credit score, both for you and your business. Lenders will generally look to ensure you’ve been working for yourself for at least one to two years at the time of your application. The only other major difference comes in terms of documentation requirements: you’ll have to submit your tax returns from the most recent financial year (or two most recent years). However, if you don’t have access to these, we also offer low doc finance options to self-employed individuals.

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More about bad credit car loans explained

What are bad credit car loans and how do they work?

Bad credit car loans are structured in the same way as any other standard car loan but are designed to be taken out by borrowers with less than perfect credit histories. They use the car you’re purchasing as collateral for the loan and are repaid in instalments with interest and fees.

Because of the increased risk associated with borrowers who’ve struggled with their credit, the interest and fees you’ll be required to pay will typically be higher than on a loan for someone with good credit. Additionally, the amount you can borrow and terms you can access may also be more limited.

You can speak with your dedicated Savvy consultant about your bad credit car finance options. We’ll work with you to see if your profile matches with one of our specialist bad credit lenders and, if it does, get your formal application prepared and submitted for approval.

What are the eligibility criteria for bad credit car loans?

The qualification requirements for bad credit car finance will vary depending on the lender you go with. However, in general, you’ll need to meet the following criteria:

  • You must be 18 years of age
  • You must be an Australian citizen or permanent resident (options may exist for eligible visa holders)
  • You must be earning a consistent income from stable sources (full-time, part-time or consistent casual or self-employed income, as well as eligible Centrelink payments) that meets minimum income requirements and is enough to support your repayments
  • You mustn’t be bankrupt or under a Part IX debt agreement

Minimum income requirements can vary from around $20,000 to $26,000 per year (approximately $400 to $500 per week).

How much will my bad credit car loan cost?

There’s a range of factors that can impact the cost of your bad credit car loan, such as the following:

Interest rates

As mentioned, rates will be higher on bad credit loans compared to other car loans. The following table shows how higher rates can make a big difference to the total amount of interest you’ll have to pay on your loan:

Loan size 15.00% p.a. 16.00% p.a. 17.00% p.a. 18.00% p.a.

Calculations are based on a five-year loan term and monthly instalments.

As you can see, on a $30,000 loan, the jump from 15.00% p.a. to 16.00% p.a. could cost you over $950.


There are several fees which can be charged on your loan. These include:

  • Establishment fee: a one-off fee built into your repayments which can cost up to $600 to $900.
  • Monthly fees: an ongoing charge included on each repayment which can range from $5 to $15 or more.
  • Early repayment fees: these may be charged if you pay out your loan ahead of schedule, with the cost depending on the size of your loan and the time left to run on your term.
  • Late payment fees: these may be charged if you submit a payment late or miss it altogether. They can be costly if they stack up.

Loan amount

Because interest is calculated based on your outstanding loan balance, greater sums will result in higher overall interest outlays. This can be seen when comparing the loans in the table above. For example, on a five-year loan repaid monthly at 15.00% p.a., the total interest rises from $8,548 on a $20,000 loan to $12,822 on a $30,000 loan.

Loan term

Longer loan terms will also result in greater interest charged overall. This is because your outstanding loan balance will decrease at a slower rate, meaning interest charges will stay higher for longer. This can be seen in the following table:

Loan term Repayments Total interest Total saving
Five years
Four years
Three years
Two years

Calculations based on a $30,000 car loan repaid monthly with a 15.00% p.a. interest rate.

By shortening your term from five years to four for the loan example listed above, you’ll be required to pay $120 extra per month (or around $30 extra per week) in return for a saving of almost $2,750.

Extra repayments

If you’re able to make free additional repayments and not pay early termination fees, you could end up paying off your loan much sooner and for a lower cost. You can see this in the table below:

Loan term Extra payment Total payments Total interest Total saving Total loan term
Five years
Five years
Five years
Four years, seven months
Five years
Four years, two months

Calculations based on a $30,000 car loan repaid monthly with a 15.00% p.a. interest rate.

By paying just $50 extra per month (or around $13 extra per week), you’d clear your debt five months sooner and save over $1,300 on a loan with the terms included above.


Paying a deposit at the point of purchase reduces the size of your loan, and therefore the interest you’ll have to pay. You can see this in the table below:

Deposit Loan amount Repayments Total interest Total saving

Calculations based on a car loan repaid monthly over five years with a 15.00% p.a. interest rate.

Even a 5% deposit on a $30,000 loan ($1,500) can save you hundreds of dollars over the course of your agreement. Speak with your Savvy consultant about the potential cost of your loan and how much you could save by optimising some of the above factors.

Can I refinance my car loan with bad credit?

You may be able to refinance your car loan deal if you have bad credit. There are several situations where you might look to refinance your loan, such as:

  • Your credit score and finances have improved: if you’ve been paying off your car loan consistently throughout your term without issue, your credit score will rise. With that higher score, you could qualify for better interest rates and lower fees, potentially saving on your loan deal overall.
  • You want to adjust the length of your loan: another key reason for refinancing is to update your loan’s term to suit your new situation. If it’s improved, this may be reducing your term and paying off your loan sooner, but if you’re facing financial pressure, you can extend your term to reduce the cost of your payments (but increase its overall cost).
  • You want to remove a co-borrower or guarantor: bad credit applicants can benefit from a co-borrower or guarantor being present on their car loan. If your situation has improved sufficiently down the track, refinancing your loan can remove them from the equation.
  • Rates have fallen across the board: if you took out your car loan in a market with rates near their peak and they’ve subsequently fallen, you may wish to refinance to access the improved rate, even if your score isn’t significantly better.

However, whether you can do so will depend on your profile and lender.

First, as a borrower, you’ll need to show potential lenders that:

  • You’ve consistently made repayments on time and in full
  • You’ve decreased or eliminated other bad debts
  • You’ve continued to have stability in your life, such as a consistent recent employment, income and residential history

If you had bad credit when you took out your car loan but have made strides to improve it with the points above are considered by financiers to have “correctable credit”. This means that you’re capable of taking positive steps towards a better financial situation and are considered a lower risk than you were previously. Someone with “correctable credit” is much more likely to be approved for future loans than someone without it.

Second, and crucially, is applying with the right lender. Most financiers on the market won’t work with applicants with bad credit, even if they’ve taken steps to improve it. However, there are plenty of specialist lenders ready to provide second-chance finance to those who’ve struggled in the past. It’s imperative that you take the time to find suitable bad credit options to avoid unnecessary enquiries and rejections on your credit file.

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