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Can I get a loan while bankrupt?


Life can deal some tough lessons and one of the toughest is going into bankruptcy. Whether it’s a case of bad budgeting or a situation like a lost job, sometimes we become stuck with debts we can’t repay and bankruptcy becomes unavoidable.   After you’ve been declared bankrupt, you might need cash to help you get back on your feet or you may want to rebuild your credit history by taking out a loan. Yet it can be hard to find someone who is willing to give you a fair go.   The harsh reality is that a mainstream lender, like one of the big banks, is unlikely to give you a loan while bankrupt. Banks are incredibly risk averse and bankruptcy signals a red flag to them, regardless of the reason for going bankrupt in the first place.   However, there are specialist lenders out there who are willing to give you a cash or car loan while bankrupt. So what do you need to be aware of when looking for a loan?

Be honest with yourself

Do you have the income, capacity, and commitment to repay the loan? There’s no point entering into a loan agreement if you will miss repayments or end up defaulting on it, as this will only make the situation worse.

Be aware of the costs and read the fine print

Bankruptcy or bad credit loans typically have higher fees and interest rates than standard personal loans. It’s important to read the product disclosure statements carefully to make sure you’re fully aware of what the charges are and the requirements of the loan before entering into a contract.

Only do business with reputable lenders

Look into the reputation of the lender before committing to the loan. Check out their Facebook page, if they have one, plus external reviews. If there are lot of complaints and negative reviews, they’re probably not a lender you want do business with. You can also check their credit licence is valid by visiting the ASIC website.   These are just a few tips to help you in your search for a bankruptcy loan. Ultimately it’s about being smart and finding a lender that is committed to helping you achieve a brighter financial future.   Lastly, if you need support during your bankruptcy and are having trouble with existing debts or bills, contact a financial counsellor. It’s a free and confidential service and the MoneySmart website has a list of services available in every state and territory.

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. 

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Are you eligible to apply?

  • I am 18 years or older
  • I have not entered into bankruptcy or part 9 agreement within the last 12 months
  • I am willing to provide my Bank Statements online
Please note: Bank statements can only be submitted via our secure online service.