Bad credit? Don’t sweat it
If you’re saddled with a bad credit score, it’s important to know that you’re far from alone: hundreds of thousands of Australians find themselves in that very position. While it hasn’t always been the case, there are more specialist lending options today than ever before when it comes to financing loan applications from those with imperfect credit histories. Just because you have bad credit doesn’t mean you can’t be approved for the loan you need to help you achieve your financial goals.
We understand that bad credit can happen for a myriad of reasons and believe that Australians in this position deserve a second chance at financing. Because of this, we’ve built partnerships with lenders across a variety of finance types to help you find your ideal loan. Whether you’re in the market for your next car, a new home or miscellaneous funds for your personal needs, you can compare your options here and start the application process today.
Why apply for a personal loan with Savvy?
Our range of bad credit loan options
Car
Bad credit doesn’t need to be a roadblock for your car loan application. You can apply with Savvy today and be connected with one of our specialist partners through your dedicated consultant, all in as little as 48 hours.
Leisure
If you’re looking to take your holiday to the next level by purchasing a caravan, boat, jet-ski or anything else, you can get approved through Savvy. Our consultants work around the clock to have your applications turned around fast.
Commercial
Whether you’re just starting up a new business or continuing to run your existing one with a less than perfect credit score, you can still access the financing you need to purchase or lease commercial assets like vehicles and equipment.
Home
Even with a loan as large as a mortgage, there are lenders operating in the market who can help make your home purchase dream a reality. Start comparing from flexible lender options to get the ball rolling on your application.
Personal
Personal loans can be used for just about anything you like, from funding your wedding, holiday or consolidating existing debts (as well as everything in between). Compare offers with Savvy and get funded within just 24 hours.
Small loans
Otherwise known as cash loans, this type of finance is designed for smaller investments up to $5,000 and shorter repayment terms. Your credit score will take a back seat to your ability to repay your loan, so you can be funded in just 60 minutes.
How are bad credit loans different from regular loans?
Firstly, and most importantly, these loans are offered with higher interest rates and fees than those for borrowers with good to great credit scores. This is the case because interest rates are set in large part based on risk, meaning that if your lender believes you to be at greater risk of defaulting or struggling with your repayments down the track.
The second major difference between standard and bad credit loans is the greater restriction on borrowing. Because bad credit borrowers are seen as posing a greater risk of default, lenders are generally unwilling to approve loans as large as those for applicants with a strong credit history. This means that while there’s no theoretical maximum amount when it comes to car loans (dictated by the value of the car and your borrowing capacity), the absolute maximum you may be approved for is $100,000 with bad credit (though it’s usually less).
Aside from these factors, though, the function of your loan is no different: you’ll still receive a lump sum which you’ll repay in instalments over a period as agreed in your loan contract. Above all else, they can open doors for you if you’ve struggled with your credit. You can get the financing process started by applying through Savvy today for your chosen loan type.
How do I get approved for a bad credit loan with Savvy?
The process of applying and getting approved for bad credit finance will vary depending on the type of loan you’re after. For instance, the application process for car or leisure finance is different from personal and small loans. As such, it’s important to familiarise yourself with the process for the type of loan you’re looking for.
Below is the application process for a bad credit car loan with Savvy as an example (which is very similar to those for commercial and leisure finance).
- Fill out our online application form: our simple form helps us find out about you, the type of loan you’re after and your financial situation, including the nature of your credit history. By completing this application, your consultant can get to work searching for any suitable options among our panel of lenders.
- Supply any required supporting documents: as part of this process, you may be required to submit some further documentation to help us confirm your income and employment. This can be done online via our portal, which will also enable you to electronically sign other documents such as your consent form.
- Speak with your consultant about your options: once your consultant has considered the loans available among our panel, they’ll give you a call to discuss your situation and what the best offers may be in terms of their cost and suitability. They can also provide you with an indicative interest rate. From there, you can give them the go-ahead to prepare your application for formal approval.
- Have your loan approved, settled and drive away: formal approval can take as little as one business day, after which we’ll handle the settlement process once everything is signed. From there, you’ll be the owner of your new car, so you can drive away!
How to increase your chances of approval for a bad credit loan
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Even with very bad credit, taking steps to start increasing your score will boost your chances of being approved for the loan you’re after. One of these is continuing to pay your bills and other liabilities such as loans in a timely manner. Doing so will help your credit score grow and fill your credit file with positive reporting in the weeks and months leading up to your application.
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The less debt you have outstanding, the greater your chances of approval. Each debt, such as outstanding loans or credit cards yet to be repaid, will impact your ability to borrow, as they come with monthly commitments to contribute instalments. By paying them down, you’re not only removing that roadblock but also showing lenders you’re capable of promptly paying your debts.
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Displaying savings will also increase a lender’s confidence in you as a borrower. This is because you’re showing financial discipline in being able to set money aside and save up over an extended period. On top of this, a deposit reduces the required loan amount, which in turn cuts down on the potential risk taken on by your lender. Of course, deposits are required for home loans, so saving up a larger deposit in this case can help you get approved and potentially save you a significant amount.
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With lower limits on your credit cards, you decrease the amount of overall unsecured debt you’re exposed to. Even if you don’t have any debts outstanding on your credit card, it can be impacted by a high limit. By reducing your limit, you can improve your chances of receiving the green light on your application from your chosen lender.
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Lenders want to see stability in your life, as this suggests changes to your income and expenses are minimal and thus reduce the risk of becoming overwhelmed by your loan repayments. Staying in the same job for an extended period and trying to stick to the same address in the months and years leading up to your application can make a big difference (particularly when applying for a home loan).
