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
Although you don’t need to fully convert a bad credit score into a good one to be approved for your personal loan, showing recent discipline and improvement in this area can help your chances of approval. For instance, if you’re able to keep on top of your bill payments consistently in the months following your discharge, you’re likely to be better placed to apply for a loan.
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Stay in a stable job
Earning a reasonable income with job stability is another way to maximise your approval chances as an ex-bankrupt. Because lenders must be fully confident that you’ll be able to manage your repayments comfortably across your loan term, showing that you’ve been able to hold down work over an extended period will help you out.
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Build your savings
On top of earning a comfortable and consistent income, doing what you can to increase your savings can also help you get approved. Building the funds in a savings account requires discipline, which lenders appreciate, while also providing you with a safety net should your income stream run dry during your loan term.
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Enlist a guarantor
You may also benefit from applying with a guarantor to help add security to your personal loan. This is someone who agrees to guarantee the repayment of the loan, even if you default on its payments. With a guarantor, your chances of approval are likely to increase.
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Only apply for what you can afford
Perhaps the simplest way to maximise your chances of approval is to only apply for what you can afford. It’s important to have a handle on your budget, as if your lender believes that you won’t be able to afford your repayments, you’ll either be offered a smaller loan or rejected outright. It’s important to consider your monthly income and expenses before applying.
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.
Your estimated repayments
$98.62
| Total interest paid: | Total amount to pay: |
| $1233.43 | $5,143.99 |
Apply for your personal loan online
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Complete our simple online application form
First and foremost, you’ll need to fill out our quick and easy online form. Tell us about yourself, your finances, the loan you’re after and why you need it in just a few minutes.
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Compare your options with Savvy
Once you’ve done this, you’ll be able to assess the products on offer from our partnered lenders. A member of our team will reach out to help you choose the best available offer.
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Send your documents and formally apply
If you’re happy with one of the options available, you can go ahead and formally apply. We’ll handle this for you; simply send the required documents through our online portal and we’ll do the rest.
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Get approved and sign your contract
We’ll let you know when you’re formally approved, which can happen in a matter of hours, and all you’ll need to do is sign your loan contract electronically to receive your funds as soon as the same day.
Personal loan eligibility and documentation
Eligibility
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Age
You must be at least 18 years of age
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Residency
You must be an Australian citizen or permanent resident (or, in some cases, an eligible visa holder)
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Income
You must be earning a stable income that meets your lender’s minimum threshold (this can start from as little as $20,000 per year)
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Employment
You must be employed on a permanent, casual or self-employed basis
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Credit score
You must meet your lender’s minimum requirements related to your credit score and not be bankrupt or under a Part IX debt agreement
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Contact
You must have an active phone number, email address and online bank account in your name
Documents
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Personal information
Your full name, date of birth, address and contact details
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Photo ID
Such as a driver's licence or passport
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Payslips
Your last two consecutive payslips (or your last tax return if you're self-employed)
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Assets and liabilities
Information about any assets you own (such as a car or house) and liabilities in your name (such as other loans)
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Bank statements
90 days of bank statements may be requested, but not always
