Unsecured Personal Loans No Credit Check Australia

Finding the right personal loan to suit your needs when you’re struggling with your credit.

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Last updated on May 4th, 2022 at 03:21 pm by Bill Tsouvalas

Unsecured Personal Loans No Credit Check Australia

Getting an unsecured personal loan to suit your needs is easy given the wealth of options on the market, but you may find that a bad credit score could impact your success rate with some of the bigger lenders. However, there are still plenty of avenues available to people with bad credit looking for personal financing. Find out more about your bad credit unsecured personal loan options in Australia, and whether you can get one with no credit check, here.

Can I get an unsecured personal loan with no credit check in Australia?

No – there are no lenders who can offer you an unsecured personal loan with no credit check in Australia. Even if you’re borrowing the minimum amount offered by your lender, and even if your lender advertises no credit checks, your credit file will always be assessed as part of your application. This isn’t always to do with your credit score, however.

Bad credit lenders are far more lenient when it comes to credit scores, so they aren’t typically bothered if that is the only negative factor in your application. Your credit file is assessed to gain more personal information about you, such as your residential history and other identifying information. In addition to this, it can reveal public record information like court judgments if you’ve been declared bankrupt or recent defaults on your record for similar types of loans which might suggest a lack of reliability as a borrower. It’s important that you can’t apply for a loan hoping that your lender won’t find these; they will.

The primary reason why borrowers might want to avoid a credit check is that their score is in the lower range and they believe it will impact their capacity to get a personal loan. While this can be the case, particularly with larger bank and non-bank lenders like credit unions, there are plenty of options that you can look to if you’re struggling with your credit score and need personal financing.

What are my unsecured personal loan options in Australia if I have to get a credit check?

If you’re in a position where you feel that avoiding a credit check will help your application, you should probably look to apply for a bad credit personal loan. These are available to customers with bad credit through online lenders across Australia and are an alternative to personal loans with traditional eligibility criteria. These lenders are not as concerned by your current credit score as they are with the current state of your finances and any personal circumstances that might have led to your position. There’s a reason why these are often called “second-chance loans”: bad credit lenders are there to provide you with financing you may not otherwise receive and afford the opportunity to improve your credit score.

Bad credit unsecured loans function in the same way as any other unsecured personal loan: you apply for a certain amount to your lender and, if approved, you’ll pay it back over a pre-determined term with interest and fees. You can still choose whether your personal loan has a fixed or variable interest rate and the term over which you can repay it (between one and seven years). The amount you can borrow will depend on your current finances and what your lender determines is an appropriate and safe amount for you to repay, but the general maximum is $50,000 and a minimum of around $2,000 is likely to be in place.

Just because the application is open to bad credit customers doesn’t mean you’ll be guaranteed approval, though. Your lender still reserves the right to turn down your loan application if they don’t believe the amount you’re asking for is realistic or if you have recent defaults for similar loans showing up on your credit file. As such, you should treat your application as carefully as you would for any other type of financing to ensure the process runs quickly and smoothly.

How to get approved for a bad credit personal loan?

Pay off your current debts

If you have debts outstanding at the time of your unsecured personal loan application, paying them off prior to applying will make you more appealing as a potential borrower to your lender

Lower your credit card limits

Lowering your credit card limits is a tactic that many adopt when aiming to improve their credit score. Doing so ahead of your application will show your lender that you’re serious about your finances and keen to service your loan as a means of raising your score.

Only ask for what you can manage

Countless personal loan applications have fallen flat in years gone by due to the borrower asking for more money than they appear capable of comfortably repaying. It’s important to only ask for what you can manage and what you need overall

Carefully review the lending criteria

Looking over these criteria carefully prior to submitting your application can ensure that you’re approved in a prompt manner. Reviewing these will make you wholly aware of any documents or qualification points that you might’ve otherwise missed that could delay or sabotage your application.

Common unsecured bad credit personal loan questions

Is it better to get a secured or unsecured bad credit personal loan?

Both secured and unsecured personal loans have their benefits for bad credit borrowers. Secured personal loans can improve your chances of approval by providing an asset as collateral, as well as gaining access to greater funds. However, your asset may not always be accepted for collateral (such as an old car) and unsecured assuages any lingering concerns you may have about losing it, despite the chances of this happening are non-existent if you keep up with your loan. Overall, though, many bad credit customers choose to go with unsecured personal loans.

Can I get an unsecured personal loan with unpaid defaults?

Yes – there are lenders available that can offer you a bad credit personal loan even with unpaid defaults on your record. Paying these defaults will go a long way towards the success of your application, but even if you can’t do so you’ll be able to find an option to fulfil your financing needs.

What can I use an unsecured bad credit personal loan for?

The beauty of bad credit personal loans is that you can use them for just about any purpose you need, such is their versatility. Many borrowers use them to fund holidays or weddings, fund home renovations, cover or consolidate existing debts or simply help out with regular expenses like weekly grocery shopping and phone or utility bills. They’re very much designed to be as broad as possible so that you can use them to help with any of your personal finance needs.

Can I apply for an unsecured bad credit personal loan if I’ve been declared bankrupt?

Yes – but only after you’ve been discharged for 18 months. Any applications prior to that point are restricted by the conditions of your bankruptcy.

Will a guarantor help me get an unsecured bad credit personal loan?

Yes – guarantors are an added layer of security to your personal loan which can help raise your chances of approval and the amount of money you can potentially withdraw. If you have someone in your life able and willing to go guarantor on your unsecured bad credit personal loan, such as a parent or sibling, it might be worth your consideration.

Should I get pre-approved for my unsecured bad credit personal loan?

Yes – this can be a great way to set yourself a budget within which to operate, especially if you weren’t sure what you would otherwise be approved for, and they can also provide lenders with more confidence that you’re serious about the loan and capable of repaying it. This isn’t a confirmation, though; even if you’re pre-approved, it doesn’t guarantee that you’ll be approved when you submit your final application.