What is an unsecured bad credit loan?
An unsecured bad credit loan assists people who have a bad credit history and who cannot offer an asset (such as a vehicle) as security for the loan. This type of loan is generally considered a higher-risk to the lender, as they have nothing to sell if the loan is not repaid. This often causes the interest rate to be higher.
How do I know if I have a bad credit history?
In Australia, anyone who has ever had a loan, credit card or type of credit will have a credit report. This report contains information about you and the loans etc. you have had. If any of the following events have happened within the past 5 years, they will be listed on your credit report and will cause you to have a bad credit history.
- An overdue debt that is overdue by 60 days or more, and when the debt is at least $150
- Poor repayment history
- Declined credit applications
- Part 9 Debt Agreement - a legally binding agreement between a debtor and their creditor, where the creditors agree to accept an amount of money that you can afford to pay
If you are still unsure whether you have a bad credit history or not, you can obtain a copy of your report for free from Equifax.
How hard is it to get an unsecured bad credit loan with Fair Go Finance?
Traditional lenders, like Banks, are unlikely to approve an unsecured bad credit loan. Therefore, the amount of lenders in Australia that offer unsecured loans for bad credit customers are more limited. The key is to understand what is listed on your credit report and search for lenders who are willing to consider your bad credit history and credit score.
At Fair Go Finance, if you have any of the following listed on your credit report, we may be able to assist you, subject to your credit score and our policies and guidelines.
• Paid defaults
• Unpaid defaults
• Bankruptcy or Part IX Debt Agreement (where you entered into bankruptcy over 12 months ago.)
It is important to know that completing a number of applications to different lenders is generally considered detrimental to your credit report.
Before submitting an application, try to speak to the lender and advise them of your bad credit history. They can then indicate whether it is worth applying and creating a new credit enquiry on your credit report.
The advice provided on this website is general advice only. It has been prepared without taking into account your objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs.