Bad credit is not uncommon these days and many of us, at one point of time or another, have faced it and wondered if it is possible to tackle in a better way. Due to this, lenders are becoming more likely to offer bad credit loans, which are small loans up to $2,000 that are repaid over a short term. They are a great option if you have bad credit and need funds to meet urgent requirements, and we may be able to help you find a payday loan even with a low credit score. However, if you have a history of struggling to meet repayments and are unsure if you will be able to repay loans for bad credit, please contact us or read the following information to make an informed decision.
Note: Viva Payday Loans is a lender-finder service in Australia, we do not offer financial advice. Please consider seeking independent legal and financial advice to check how the information and ideas presented on this website relate to your unique circumstances.
How Do Bad Credit Loans In Australia Work?
One of the main reasons why cash loans for bad credit are sought after by so many people across the world is that they are approved irrespective of an applicant’s credit score. Usually, if you have bad credit, mainstream loan channels like banks or credit card companies are unable to service your loan requirements. In such a situation, loans for bad credit are an easy option that people can resort to.
Small loans for bad credit can be offered by direct lenders because the loans are automatically withdrawn from the recipient’s bank account. If the applicant has a regular source of income and cash to cover repayments after essential spending, this is usually good enough to cover the monthly repayments from a lenders’ point of view, no matter the credit score.
Note: Viva Payday Loans do not perform a credit check, however, the lender you are referred to may conduct a full or partial credit check as part of their assessment policy. Viva Payday Loans has no control over the assessment of applications.
Am I Eligible For Loans With Bad Credit?
If you have bad credit and need access to funds to cover any emergencies or urgent requirements, there are a few areas of criteria that most lenders will need you to meet. For bad credit loans in Australia, you must be an Australian citizen and be 18 years of age or older. You must also have a regular source of income, either from part time or full time employment, benefits or property interests.
If you meet all of these criteria requirements, you may be eligible for cash loans for bad credit and personal loans are usually the preferred option. If you are worried that you do not meet this criteria and may find it difficult with repaying your loan, please contact your lender before entering into a bad credit loans agreement.
Bad Credit Loans & Improving Your Credit Score
A bad credit score simply means that you have a ‘habitual history’ of poor management of your monetary resources. It is not an accurate representation of your current financial situation, which is an aspect that trusted small loans for bad credit providers will evaluate, rather than looking at your past financial history.
Bad credit may have been incurred due to a variety of factors, including:
- Non-payment of past loans
- Defaulting on credit card payments regularly
- Using up available credit too many times
- Non-payment of instalments for goods/services
Despite these factors and having bad credit loans in Australia as an available option, there are several ways to improve your credit score. One of the most common ways of doing this is avoiding loans for bad credit unless you have exhausted other ways of acquiring funds, such as personal borrowing or advances from your employer. If taking a loan is the only alternative, make sure that you pay it duly to avoid further damage to your credit score.
Never use the practise of ‘shuffling’ from one load to another to avoid stacking your debts up and finding yourself in a completely unmanageable position. You should make it a point to pay the bad credit loans off and close all debtor accounts.
You should also pay all of your bills on time and try not to approach the ‘zero credit’ mark too often. It’s preferable to have a certain ‘buffer’ of credit that you can use when emergencies arise.
Are You Eligible For Bad Credit Loans in Australia?
As we work with a panel of over 15 trusted lenders who offer cash loans for bad credit, the eligibility criteria will differ from lender to lender. To apply through Viva Loans, we only ask that you are at least 18 years old. However, some common criteria you might see include:
- Be able to provide proof of your income, whether from employment, Centrelink or other government benefits.
- Have three to six months’ worth of bank statements available, so that lenders are able to offer a loan that fits in with your current financial situation.
- Be able to provide details of all existing liabilities, including credit card debt and any other outstanding loan obligations.
If you meet the above, the best way to find out if you are able to get a loan is to apply online now.
Bad Credit Loans FAQs
- What Are Loans For Bad Credit?
Bad credit loans are small loans for those with poor credit history that are usually repaid over a short term. However, they can often be more expensive than regular loans and can be subject to higher interest rates.
- Can I Get A Loan With Bad Credit?
It may be possible to take out cash loans for bad credit from some lenders, although it may be more difficult for you than for people with better credit history. With most bad credit loans, the lender will look at your current financial situation and potentially your financial history over the past 6 months, and base a lending decision on that. They will look at your income, your regular outgoings and your essential expenses to determine whether you would be able to repay the loan on time.
- What Are The Advantages Of Bad Credit Loans in Australia?
Most bad credit loans tend to be repaid over a short term, so you won’t have to worry about repaying debt over a long period of time. Many bad credit loans in Australia tend to be available pretty quickly too, particularly if you use a trusted online lender.
- What Are The Disadvantages Of Bad Credit Loans?
Loans for bad credit are often more expensive than loans for those with good credit because they are repaid over a shorter period of time. It is important that you ensure you know all of the costs and fees involved with your loan agreement before entering into a contract. It is also crucial that you make sure that you can afford any bad credit loans that you take out and if you feel like you may struggle, please contact your lender.
- Are There Any Alternatives To Bad Credit Loans in Australia?
As with any loan option, there are plenty of alternatives that you should consider before seeking loans for bad credit. To avoid bad credit loans completely, think about personal borrowing from friends or family. This can be an interest-free agreement with someone you trust to help you cover the cost of your emergency situation. Another possibility is enquiring about a salary advance from your employer. Both of these are alternatives that do not involve a loan provider and won’t effect your credit score any further.
If you have exhausted all other options, some loan alternatives to bad credit loans include short term loans and secured loans. Short term loans could still be classed as small loans for bad credit, but they are typically on a much smaller scale than other personal loans. They are an ideal alternative if you are happy with borrowing a small amount, but if you need a larger amount, you might want to consider a secured loan. This involves borrowing a larger amount of money over a longer term with a standard interest rate, but there is a higher risk from having to secure the loan against a valuable asset.
If you need any more help with bad credit loans in Australia or would like to discuss your potential options, please do not hesitate to contact us.