I have bad credit, can I get an unsecured personal loan in Australia?

Unsecured Personal Loans for People with Bad Credit

If your credit score or history is less than perfect, our team at Debt Fix may be able to assist with a loan.

Personal loans provide funds for debt consolidation, asset purchase or any other worthwhile purpose. If you have been turned down for credit due to a low credit score or bad credit reputation, there may be solutions outside the banks that are worth considering.

Finding suitable loans for people with bad credit scores also makes Debt Fix an expert in the field.

For a lot of people, a loan is not the answer and you must consider your individual set of circumstances and the terms and conditions before you agree to any finance. Seeking the opinion of a trusted, qualified professional is also a good thing to consider and understand that a loan is not always the best answer and will not fix every problem.

Talk to our specialist on 1300 332 834 and see how we can help you!

Can I Afford the Personal Loan?

• First, you should calculate whether you can afford the loan without too much change to your current lifestyle. You should compare what you are presently paying in total under your existing debt repayment commitments with what you would be required to pay under one large loan.
  
  
• The internet has numerous debt repayment calculators to help with this comparison analysis and Debt Fix hosts a range of calculators also that you can use for this purpose. Before using these calculators and comparison tools, please keep in mind that they should be considered as a guide only and interest rates and conditions may vary. If you are unsure, speak to a debt specialist by calling us on 1300 332 834.

Personal Loan Interest Rates: Fixed or Variable?

• Once you have decided that a bad credit personal loan is the way to go, you need to think about whether you want a fixed interest rate or variable. Each has their pros and cons depending on your needs and comfort level but in deciding which way you want to go you need to ask yourself which provides you with the best level of comfort in the event your situation changes.
  
  
• Speaking of unexpected changes, it may be wise to consider insurance in the event that your situation unexpectedly changes (for example, unemployment or an accident) in order to cover your loan repayments when your income is adversely affected.

1. Check Your Eligibility

• You must be at least 18 years old and have a credit file which credit providers deem acceptable.
• You must live in Australia or be a permanent resident.
• You must not have been bankrupt in the past and have the minimum amount of income required by the lender to demonstrate that you can afford the repayments.
• If you gamble regularly, it’s likely that a loan application will be rejected and if gambling is a problem for you, you should seek counselling.

2. Check Your Affordability

A loan application will only be approved if you can demonstrate that it’s affordable. Once again, you may consider using a free Debt Fix borrowing calculator to test your affordability.

3. Apply Through A Specialist

Apply through a bank or finance company who knows you the best. It makes sense that if your wages are paid to a particular bank, then that bank would have a fair idea about your income and spending habits. This being the case they would be in a pretty good position to assess your credit rating and worthiness.

4. Check Your Credit History

• The key to any successful loan application is whether or not you have a good credit reputation. There is no better predictor of your future financial behaviour than you past financial behaviour and therefore a good credit reputation is a crucial component for a lender to consider whether or not to provide finance. If you live from pay to pay, if you consistently pay your bills late or you constantly overdraw your account then these are all signals that indicate to a bank or finance company that there is an increased risk that you will struggle to meet your loan commitments.
• On the other hand, if you have savings, if you pay your bills on time and you have a good credit history and if your credit cards are below their credit limits, a finance provider may see these as positive signs that you can afford a loan.
• It’s all about being financially responsible and both the consumer and the lender have a role to play. Contact Debt Fix on 1300 332 834 to see what options are available for your debt free future.

Benefits of Personal Loans

1. The biggest benefit when it comes to getting a personal loan is that you get to realise your ambition quickly. Once the loan is approved and the money is in your account, it’s yours to do with what you want.
   
   
2. Secondly, if its debt consolidation you are using the loan for, it’s extremely convenient to have multiple debts under the one payment, after all its easier to manage just one debt as opposed to multiple credit facilities.
   
   
3. Personal loans generally have a finite term which means that you will know when the loans end date is, unlike a credit card that has a perpetual life.
   
   
4. Generally speaking, personal loans can (in some cases) offer a cheaper interest rate than a credit card. As with anything there are exceptions to this rule and interest rates charged depend on your borrowing risk, the lender and your credit reputation.

Consequences of Personal Loans

Like any option that presents a benefit, there are always consequences to consider and these tend to counter any positives. Whether or not a personal loan is the “right choice” depends on whether the benefits outweigh the consequences so it’s important to weigh up these options before any decision to take a loan is made.

1.  Consolidating debts under one payment must provide for a financial benefit, that is, you need to ensure when you swap bad debt for different bad debt that you actually save money per month otherwise it could be a case of going from the fry pan into the fire.
   
   
2. Before you get a personal loan you must review your budget and test whether the repayments are affordable / manageable. Whilst the lender has a responsibility to do this also, no one knows your budget better than you. When you are considering the affordability, it’s a good idea to consider whether or not you income will change that is, in the event your income unexpectedly drops, you should ask yourself whether you will be able to maintain the normal payments.
   
   
3. If you are intending the loan for debt consolidation, you must consider closing those credit cards / credit lines unless you run the risk of racking those credit cards up again and becoming further indebted.