How to Get Small Loans With Bad Credit in Australia

Getting a small loan with bad credit can be a headache, especially if you don’t know where to start. Some lenders reject your application outright when they see your credit standing, while others may look into other factors, such as your employment details.

Nevertheless, there are still lenders out there who can lend small loans with bad credit. However, it can be challenging, especially since most require collateral. 

In this article, we’ll talk about where and how to get small loans even if you have a bad credit standing.

What this article covers:

Where to Get Bad Credit Small Loans in Australia

Identifying where to get bad credit small loans is essential to know which one best suits your needs.

You see, small loans in Australia range from $300 to $3,000 and typically have repayment terms of 16 days up to two years. 

With that in mind, you can get small loans from different loan types. As long as you’re not borrowing more than $3,000, it’s generally accepted as a small loan.

You can get these types of small loans for bad credit:

  • Personal Loans: Banks or other financial institutions typically offer these for personal use, such as paying for a trip or making a large purchase. Some lenders offer small personal loans even to those with bad credit. 
  • Payday Loans: These short-term loans are usually due on the borrower’s next payday. They’re typically for small amounts and have high-interest rates and fees.

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  • Quick Loans: These loans are designed to be processed quickly, often within hours or minutes. You can even get a loan of $1,000 or higher.
  • Credit Advances: These funds are advanced to a borrower on a line of credit, which can be drawn down as needed. You can use them for any purpose.
  • Payday Advances: These are similar to payday loans in that they’re short-term loans usually due on the borrower’s next payday. Credit card companies typically offer them. The borrower can access the funds through an ATM or bank withdrawal.
  • Overdrafts: These loans are offered to clients with an existing bank account who need to cover a shortfall in their funds. They allow them to withdraw more money than they have in their account up to a pre-approved limit.

Look for direct lenders who can offer these types of loans. You can get a small loan from them, such as a $400 loan.

Process of Getting Bad Credit Small Loans

Here’s a simple step-by-step process on how to get a loan with bad credit fast:

  1. Research different lenders that offer small loans with bad credit in Australia. Check the interest rates, repayment terms, and other fees associated with the loan. 
  2. Gather the necessary documents for the loan application. Please refer to the list below to know the primary requirements.
  3. Fill out the loan application form. Make sure to provide accurate information and answer all questions truthfully. 
  4. Submit the loan application form and wait for the lender to review it. This is mainly done online, so it’s much less of a hassle now. 
  5. If approved, the lender will provide the loan amount and repayment terms. Read and understand the terms and conditions before signing the agreement. 
  6. Make timely payments to avoid late fees or other penalties and enjoy a micro loan again in the future. 

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Eligibility

Most lenders will need you to:

  • Be at least 18 years old
  • Be an Australian citizen or a permanent resident 
  • Have an active bank account that has received regular income for at least three months 
  • Earn a stable regular income in Australia

Requirements

These are the most important documents you’ll need:

  • A copy of your ID
  • A short application form with details such as your address and phone number
  • 90-day history of bank transactions
  • Proof of income (e.g. a payslip or Centrelink income statement)
  • Collateral attachment

Remember, some lenders might ask for additional documents, even if you borrow a small $150 loan.

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Unsecured Loan vs Secured Loans 

One of the requirements for a guaranteed loan for bad credit borrowers is collateral documents. Why? Since you have bad credit standing, they’ll need assurance that they’ll get something from you if you default on your loan. They’ll loan you money equivalent to the value of your collateral.

On the other hand, unsecured loans don’t require collateral, which means the borrower doesn’t have to put up any assets as security. Instead, the lender will assess the borrower’s creditworthiness and income to determine the loan’s terms and interest rate.

Since you have bad credit standing, an unsecured loan might not work for you. Get a secured loan instead.

Types of Collateral to Attach

Here are what most lenders will accept as collateral:

  • Residential, commercial, or rural property
  • Machinery, equipment, and vehicles
  • Accounts receivable

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Conclusion

If you have a bad credit standing and need quick financial assistance, getting secured loans is the only option for getting a high approval rate. Ensure that you have the necessary documents for your collateral and that they equal the amount of money you’d like to borrow.

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