Written by Once you’ve been discharged from your bankruptcy, you may still be able to get a personal loan. There are specialist lenders on the market that can work with individuals who’ve struggled with their credit in the past, including previous bankruptcies.
How can I get a personal loan as a discharged bankrupt?
As long as you meet your lender’s criteria and can show that your loan’s repayments are affordable for you, you can be approved (we'll get into some of the criteria later on). However, most lenders won’t approve loans for people with recent bankruptcies on their file, so your options won’t be as great.
Savvy is partnered with a panel of trusted lenders offering personal loans to a wide variety of people, including some that may be able to work with discharged bankrupts.
How much can I borrow if I’m a discharged bankrupt?
When it comes to unsecured bad credit loans, you generally won’t be able to borrow much more than around $10,000, with available amounts starting from as little as $5,001. However, there are several variables that will impact the amount you’re able to borrow, including:
- Income and expenses: the more money you have available after your expenses are deducted, the more you’ll be able to borrow.
- Employment stability: lenders prefer borrowers who’ve been working in the same job and earning the same pay for as long as possible.
- Living stability: as is the case with employment, if you’ve been living in the same place for some time, you’re more likely to be approved (and approved for more) than someone who’s moved around a bit.
- Recent financial record: your lender will also look at how you’ve managed your finances during your bankruptcy and since you were discharged to see if you’re responsible with your funds.
- Loan security: if you’re putting up a valuable asset as collateral for the loan, such as your car, you may be able to secure a lower rate and greater loan sum than you would with an unsecured deal.
How much will my personal loan cost?
Personal loans for discharged bankrupts and borrowers with bad credit are considered riskier than other loans by lenders, so they generally come with higher rates and fees. It’s worth understanding how many different factors help determine the cost of a loan, though:
- Interest: the higher the rate, the more you’ll pay.
- Fees: establishment and ongoing fees (as well as potentially early repayment fees) will also beef up the cost of the loan.
- Loan amount: because interest is calculated based on your outstanding loan balance, greater sums will result in more interest being charged.
- Loan term: for the same reason, longer loan terms will cost more, as your balance will stay higher for longer.
- Repayment frequency: if you make additional repayments, you’ll be paying your loan down more quickly and therefore reduce its cost.
Can I apply for a loan if I’m on Centrelink benefits?
Yes – even if you’re receiving part of your income from Centrelink benefits, you can still be approved for a personal loan (as long as you meet all your lender’s criteria, of course). Lenders dealing with these loans won’t accept all Centrelink payments, though, so here’s a list of benefits that may qualify:
- Age pension
- Carer payment
- Disability support pension
- Single parent payment
- Veterans’ pension
However, most lenders won't approve applications if 100% of your income stems from Centrelink. If you're unsure about what your options may be, you can get a free, no-obligation quote with Savvy and speak to one of our experienced consultants about your next steps.
How to increase your approval chances as a discharged bankrupt
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Display a recent financial improvement
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Stay in a stable job
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Build your savings
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Enlist a guarantor
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Only apply for what you can afford
Personal loan repayment calculator
It’s important to have an idea of what different loans might cost you overall before you apply. Fortunately, Savvy’s personal loan repayment calculator is simple to use and tells you everything you need to know about how much different offers might add up to overall based on a variety of different factors.
Apply for your personal loan online
Personal loan eligibility and documentation
Common queries about personal loans for discharged bankrupts
You can be employed in just about any type of work to be eligible to apply for personal financing. Full-time, part-time, casual and self-employed workers can all apply and get approved for personal loans (provided they meet the minimum income requirement).
This income must be stable and consistent, though, so if you’re earning an irregular amount from a casual job you started a month ago, you probably won’t be approved.
Yes – we’re partnered with lenders who offer secured personal loans for borrowers with bad credit, but the majority of personal loans are unsecured, meaning you won’t be required to place an eligible asset as collateral against your loan as part of the agreement.
While you can benefit from cheaper rates and fees, as well as expanded borrowing power, from securing your personal loan, unsecured loans are able to be processed more quickly and are easier to obtain for a wider range of people overall.
No – personal loans don’t come with any form of deposit required as part of the agreement. However, you can pay a deposit of sorts by only taking out a loan to partially cover the expenses you need to pay for and using your savings to fund the remainder. Doing that can save you hundreds of dollars overall in interest and fees, so it’s worth considering if you’re in a position to do it.
Even with unpaid defaults on your credit file, you may still be able to find a personal loan for you. The amount that you’re approved for is likely to be impacted by the number and cost of any defaults on your file, but our partnered bad credit financiers are able to work with you and offer a loan that suits your profile without requiring you to pay these off prior. If you're able to pay them off before you apply, this may boost your chances of approval.
Unlike bankruptcy, there are lenders who are willing to approve loan applications while under a debt agreement. Because these aren’t as severe as bankruptcy, such as not requiring a trustee to look after your finances over the duration of the agreement, lenders are more amenable to granting loans. Your options will be slim if you find yourself in this position, but not none.
Although personal loans aren’t available for under $5,001, you may be able to apply for a cash loan. These loans are available for amounts under $5,000 and come with fixed, government-regulated fees and interest, as well as a maximum term of two years (or one year for loans up to $2,000). They’re generally quicker to process than personal loans and you may have more options available if you have bad credit, but these loans are typically much more expensive.
