Loans for people with bad credit is a term that can carry a lot of negative connotations with it. However, there are plenty of reputable and legitimate lenders offering loans for people with poor credit. Monzi, your friendly neighbourhood lender-finder is here to explore your options, and give you the low-down.
What exactly are loans for people with bad credit?
Loans for people with bad credit are, put simply, a type of loan available to borrowers with poor credit. Generally, people with poor credit may find it harder to be approved for finance from traditional lenders, like a bank.
Monzi is a lender-finder that, in short, works with lenders offering personal loans of up to $10,000.
What is a credit score?
Your credit score, or credit rating, is a numerical score that reflects your creditworthiness.
In other words, your credit score represents how trustworthy you are as a borrower. In short, your credit score condenses all the information on your credit report down to one number.
Equifax and Experian are the two largest credit reporting bureaus in Australia. Furthermore, they each rank your creditworthiness on a scale of 0 – 1,000 (Experian) or 0 – 1,200 (Equifax).
Therefore, the higher the number, the more creditworthy you will appear to lenders.
Why is my credit score important?
Your credit rating is important because it could affect the amount of credit that a lender may offer to you, as well as the interest rate and other loan terms.
Essentially, a borrower with an excellent credit score will be seen as a low-risk borrower.
How do I check my credit score?
There are a number of ways to get a copy of your credit score online. In addition, below is a list of online providers that can give you a free copy of your credit report:
What does my credit score mean?
In short, the higher your score, the better your borrowing habits are seen to be. Therefore, below is a breakdown of credit scores:
|Excellent||800 – 1,000||833 – 1,200|
|Very good||700 – 799||726 – 832|
|Good||625 – 699||622 – 725|
|Fair / Average||550 – 624||510 – 621|
|Weak / Below average||0 – 549||0 – 509|
What affects my credit score?
There are a number of different things that will affect your credit score. In general, good borrowing habits will positively affect your credit score, and vice versa.
When looking for loans for people with bad credit, it is important to understand what affects your score.
Therefore, to give you a better idea of what kind of behaviour affects your credit score, we’ve prepared the list below:
|Positively Affects Credit Score:||Negatively Affects Credit Score:|
|Paying bills on time.||Applying too often for credit cards or loans.|
|Not applying for new credit cards or loans.||Being rejected for a credit card or loan.|
|Paying off outstanding loans and credit card debt.||Missing repayments on your credit card or loan.|
|Making repayments on time.||Bills or payments of at least $150 that are overdue by 60 days or more.|
|Having a consistently low balance on your credit card.||Getting a balance transfer credit card but not repaying the balance transfer by the end of the promotional interest rate period.|
|Having an available credit limit much higher than your usual credit balance.||Getting multiple balance transfer cards.|
Keep in mind, however, that checking your credit score will not have any negative effect on your credit score.
What are cash loans for people on Centrelink?
Loans for people with bad credit on Centrelink are, simply, loans that are available for Centrelink customers with a less-than-impressive credit report. Loans for people with bad credit can, once approved, be used to cover a wide variety of personal expenses.
Generally, lenders that offer this type of loan may be able to regard regular Centrelink payments as a form of income.
Monzi is able to find lenders offering loans for people with bad credit on Centrelink. Usually, to be considered, you will need to be receiving regular Centrelink benefits into your personal bank account for the last 90 days.
What about personal loans for people on Centrelink?
Personal loans are similar to cash loans in the fact they can be used to cover a wide variety of personal expenses.
Even if you are receiving Centrelink, and have poor credit, Monzi may still be able to find you a lender offering personal loans of up to $10,000.
Do guaranteed approval loans exist in Australia?
There may be lenders who advertise a guaranteed approval on your loan application. Now, while this may seem initially attractive, borrowers should be very cautious of lenders offering guaranteed approval.
This is due to the fact that lenders are required by law to conduct an assessment on your application. In particular, credit providers must comply with the responsible lending obligations in chapter 3 of the National Consumer Credit Protection Act 2009.
Essentially, these obligations are designed so credit providers do not enter into a credit contract with a consumer, suggest a credit contract to a consumer or assist a consumer in applying for a credit contract if the credit contract is unsuitable for the borrower.
In other words, lenders must not approve you for a loan product they do not feel you would be reasonably able to pay it back. Therefore, lenders must conduct some level of assessment on your application to deem the loan product suitable for you.
Consumers are able to access a copy of the regulations from the Australian Securities and Investments Commission (ASIC), via their website.
I need a $30,000 loan with poor credit
For a loan of $30,000 you will likely need to approach a larger lending institution, like a bank or credit union. As a result of poor credit, however, it may be difficult to be approved.
On the other hand, Monzi only works with lenders who may be able to offer a maximum of $10,000.
Can you guarantee me an approval for a poor credit loan of $5,000?
No, Monzi can never guarantee approval for any loan. As a result, final approval always rests with the lender themselves.
In addition, any lender that guarantees approval is likely untrustworthy. After all, lenders are required by law to conduct an assessment on your application.
In short, if you are looking for a $5,000 secured loan, Monzi may be able to find you a lender. Approval, however, rests with the lender themselves.
Are there loans for unemployed people with bad credit?
In short, yes! After all, some lenders may be able to offer you a personal loan if you have below-average credit and are unemployed. However, you will generally need to meet certain criteria.
In particular, lenders must be able to see you will be able to afford the repayments on your loan. Therefore, you will need to be receiving some sort of regular income into your personal bank account for at least the last 90 days.
What do I need to apply for secured loans?
In short, a secured loan is a type of loan where the borrower puts up one of their assets as security against the loan.
Generally, attaching security against the loan reduces the risk for the lender. If the borrower is unable to repay their loan, the lender is then able to sell this asset and recoup some of their losses. As a result, lenders are often more willing to loan a larger amount in a secured loan.
In particular, Monzi works with lenders who may be able to offer secured loans ranging from $2,100 to $10,000. Additionally, these lenders will, normally, accept assets like a car, motorbike, caravan or boat.
Also, it is important to keep in mind that you must be the registered owner of a vehicle to use it as security.
Will a bank offer me a loan if I have poor credit?
Generally, if you have a low credit score, it may be more difficult to be approved for a loan from the bank. You may, therefore, have to look to alternative finance options.
At the end of the day, however, it is at the bank’s discretion whether or not to approve your application.
Consumers all differ in their financial circumstances. In addition, banks may differ in their approval criteria. As a result, Monzi cannot answer this question. You will need to get in contact with a bank directly.
My credit score is below 550 – will it be difficult to be approved for a loan?
As 550 is towards the lower end of the spectrum, it may become more difficult to be approved for credit. It is, however, not impossible.
It could be difficult to be approved for a loan from a traditional lender, like a bank. Therefore, alternate consumer finance options may be another option.
Finally, Monzi can help you find a lender who might consider your application, despite your credit record.
Monzi – find lenders fast
Monzi is a lender-finder that specialises in finding everyday Aussies the finance options they need. In particular, we’ll scan through hundreds of different loan products to try and find you a lender who may provide loans for people with bad credit.
How do we help? Well, forget wasting time scanning through, and applying with, different lenders. Instead, let Monzi do the hard work for you.
Simply complete our online form, and our automated system will scan through hundreds of different loan products. Finally, we’ll try to match you with a lender who suits your circumstances.
Here’s how to get a loan with a below-average credit score
When you’re looking for loans for people with bad credit, it can often feel like you’re fighting a losing battle. Generally, it seems like half the lenders out there want nothing to do with you, while the other half just want to rip you off.
Monzi, on the other hand, could be your ticket to finding premium lenders offering personal loans – potentially all within the space of a few minutes! Interested? Well, here’s how to use our lender-finder service.
Step one – apply online
You can get started using our lender-finder service in no time. To get started, scroll up to the loan calculator at the top of the page. Next, select the amount you’re thinking of borrowing, as well as your ideal repayment terms. Finally, if you’re happy, click Apply Now.
Step two – kick back
Next, once you have completed our online form, we’ll get started doing what we do best. In short, our automated system will scan through hundreds of different loan products at lightning speed to try and find you a lender.
Step three – meet your lender
If we’re successful, we’ll let you know via text and email. From here, your new lender should be in contact, and you’ll now deal with them directly. Generally, if approved, they will send you through a loan contract to read over and digitally sign. Finally, they’ll get to work transferring your loan once you’ve approved the contract.
Usually, you can expect to see your loan within 24 hours of approving the contract.
Keep in mind, however, that access to funds is dependent on inter-bank transfer times.
Am I eligible to apply?
In addition, to use Monzi’s lender-finder service, there are a few eligibility criteria you will need to meet. Therefore, before you get started with Monzi, just make sure you:
- Are at least 18 years of age.
- Hold an Australian Citizenship or Permanent Residency.
- Have an active mobile number and email address.
- Have been receiving a regular income into a personal bank account for at least the last 3 months.
Finally, if you can say yes to all of the above, you’re ready to get started with Monzi’s lender-finder service.
What loans can I apply for?
Monzi works with lenders who can offer personal loans of $300 to $10,000. Moreover, the loans can be broken down into three broad categories:
Small personal loans:
- $300 to $1,000;
- 12-month repayment term; and
Medium personal loans:
- $2,100 to $4,600;
- 13 to 24-month repayment term; and
Large personal loans:
- $5,000 to $10,000;
- 13 to 24-month repayment term; and
Why use Monzi?
When looking for loans for people with bad credit, there are some serious benefits to using Monzi’s lender-finder service:
- Free and easy: Monzi’s lender-finder service is not only easy to use, but it is also completely free.
- Variety: Monzi works with lenders offering both secured and unsecured loans, ranging from $300 to a cool $10,000. So, whatever your budget, we may be able to find you a lender.
- 100% Aussie: We may be a 100% online company, but on the other side of your screen is an Aussie just like you. We understand what it’s like living in Australia today, and want to help hardworking Australians find the fast finance they need.
What if I can’t pay back my loan?
If you feel you are unable to afford a repayment, get in contact with your lender 24 hours before its due. Generally, they will be able to reschedule the repayment for a small fee.
If you are, however, experiencing financial hardship, get in contact as well! Lenders will have a financial hardship department that you are able to contact. Then, you may be able to restructure your loan repayments.
Can Monzi find me payday lenders?
No, Monzi does not work with payday lenders.
Payday loans, also called cash advances, can often come with high interest rates. In addition, they may also have very short repayment terms (as few as four weeks sometimes!). This, therefore, can translate into unmananageable repayments.
Alternatively, Monzi may be able to pair you with a lender offering personal loans of up to $10,000.
Will you conduct a credit check on my application?
As the lender-finder, Monzi will not conduct a credit check on your application.
However, the lender we pair you with may conduct a credit assessment of your application.
As a result, we cannot guarantee the lender we pair you with will offer a no credit check loan.
Happy with everything you just read? If so, why not scroll up to the loan calculator and get started?
If you have any questions, jump on over to our FAQs.