Need a personal loan with bad credit? View your loan options
It can be a serious matter to receive a poor credit rating and be black-marked as a poor credit risk, especially if you are looking to take out a mortgage or loan in the future.
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ANZ began as the Bank of Australasia in Sydney in 1835. It has since evolved to become one of Australia’s Big Four banks and operates in more than 30 global markets, with thousands of ATMs and branches.
ANZ has a strong retail offering, with personal loans, car loans, home loans, savings and transaction accounts, wealth planning services, an institutional banking arm and insurance products.
Your credit score will improve if you demonstrate that you’ve become more credit-worthy. You can do that by minimising credit applications, clearing up defaults and paying bills on time.
Another tip is to get the one free credit report you’re entitled to each year – that way, you’ll be able to identify and fix any errors.
If you want to fix an error, the first thing you should do is speak with the credit reporting body, which make take of the problem or contact credit providers on your behalf.
The next step would be to contact your credit provider. If that doesn’t work, you can refer the matter to the credit provider’s independent dispute resolution scheme, which would be the Australian Financial Complaints Authority (AFCA).
AFCA provides consumers and small businesses with fair, free and independent dispute resolution for financial complaints.
If that doesn’t work, your final options are to contact the Privacy Commissioner and then the Office of the Information Commissioner.
Few, if any, lenders would be willing to give guaranteed approval for a bad credit personal loan. Borrowers with bad credit histories can have more complicated financial circumstances than other borrowers, so lenders will want time to study your application.
It’s all about risk. When someone applies for a personal loan, the lender evaluates how likely that borrower would be to repay the money. Lenders are more willing to give personal loans to borrowers with good credit than bad credit, because there’s a higher likelihood that the personal loan will be repaid.
So a borrower with good credit is more likely to have a loan approved and to get that approval faster, while a borrower with bad credit is less likely to have a loan approved and to get that approval slower.
A person is deemed to have ‘bad credit’ when they have a poor history of repaying debts.
Comprehensive credit reporting means including both positive and negative information on a person’s credit file. Before comprehensive credit reporting was introduced, only negative information was included.
While some personal loans can be secured by the value of an asset, such as a car or equity in a property, student personal loans are often unsecured, with higher interest rates.
Some lenders also offer guarantor personal loans to students. These loans have lower interest rates, as a guarantor (usually a relative of the borrower with good credit) will guarantee the loan, taking on the financial responsibility if the borrower defaults.
In the best-case scenario, an application for a bad credit personal loan can be made within minutes and then be approved within 24 hours.
Fixed personal loans keep your interest rate the same for the full loan term, while interest rates on variable personal loans may be raised or lowered during your loan term.
A fixed rate personal loan keeps your repayments consistent, which can help keep your budgeting consistent, without worrying about ending up out of pocket if your rates were to rise. However, on a fixed loan you’ll also potentially miss out on more affordable repayments if variable rates were to fall.
The Australian personal loans market contains dozens of lenders offering several hundred different products. Personal loans are available through a range of institutions, including:
There are three main ways to access personal loans. You can go through a comparison website, such as RateCity. You can use a finance broker. Or you can directly contact the lender.
A bad credit personal loan is ‘secured’ when the borrower offers up an asset (such as a car or jewellery) as collateral or security. The lender can then seize the asset if the borrower fails to repay the loan.