Bad Credit Loans, Bad Credit Home Loans – Bad Credit Finance Australia

Loans with Bad Credit

If you have a bad credit history you may be wondering whether anyone will consider you for a loan.

While unsecured loans are pretty much out of the question – a secured loan is still a possibility.  Generally it is much easier to qualify for a secured loan than an unsecured loan.  Secured loans require you to either offer your house or your car as security for the loan.  Furniture and personal possessions can not be used to secure a loan.

But be warned, if you do not maintain repayments on a secured loan, your security may be sold up by the lender to repay your loan.

Applicants with bad credit will generally pay a higher interest rate than clean credit applicants.

Bad Credit Lenders
It is always better to compare various loan plans in order to find one to suit you. There are  companies which are set up especially just to offer finance to people with a bad credit history.  It is important to research available lenders as sometimes where a bank says no, Bad Credit Lenders can say Yes.

If you are unsure as to whether your credit rating is bad or if you have been told that your credit rating is poor and you are not entirely convinced, you can find out for yourself.  All you have to do is go to www.mycreditfile.com.au to obtain a free copy of your credit report.

All Aussies who have taken out any finance, loan or credit contract will have a credit file.

Your credit file records pertinent information about your place of residence, employment, previous loan and credit applications and any bad credit marks that you may have ‘notched up’ over the years.

New Credit reporting laws come into force next year.  Everyone should be aware of the changes and how your bad credit history can impact your borrowing ability.

Bad Credit Records

Currently, your credit record simply details “bad” behaviour such as defaults, bankruptcies and court judgments. Different companies assess you in different ways, so somebody may get refused credit by one company, but accepted by somebody else.

Positive Information

Currently, credit agencies collect only negative information such as defaults and bankruptcies but under comprehensive reporting, credit agencies will be able to collect extra information, including repayment histories for existing loans.

Paying on Time is Important

Comprehensive reporting will capture more bad behaviour. Late payments on credit cards or utility bills, even if just a few days late, will be noted.

Reduce Credit Card Limits

It’s the outstanding limit on your credit card, not the balance, that counts.  This can really affect your borrowing capacity when applying for a home loan.

Not all Bad Credit is the same

Dun & Bradstreet says there is a sliding scale for offences. For example, a default from five years ago is less damaging than a default in recent months.

5-7 years to clean up your  credit report

Defaults stay on your record for up to five years and bankruptcies for up to seven. A default a late payment of 60 days or more can severely impact your ability to qualify for a loan or a credit card.

Don’t Shop your loan Around

If you go from lender to lender in an effort to try and get a better deal – be careful that each inquiry is not recorded on your credit report.  Most lenders interpret numerous credit inquiries as refusals, and therefore decline your application as a ‘bad risk’.

Minor defaults count

Even a default worth just a few dollars on a mobile phone bill could result in the refusal of a mortgage application later on.

Relationship debt

If you have joint accounts, even in divorce you will be equally liable for the debts and your credit file damaged. You need to be very wary before entering into a joint agreement over which you have little control.  Take care with agreeing to guarantee someone’s loan, if they default,  your credit may be is affected.

Check your Credit Report regularly

Check your credit record regularly to ensure it is accurate. Big agencies such as Dun & Bradstreet or Veda Advantage offer free access to your file in about 10 days.

Bad Credit is all too common in Australia today.  It ranges from a minor paid default, to bankruptcy.  No matter how small or significant is your default, you will find that mainstream lenders will  not be able to assist with a home loan.

There is a specialist range of lenders in Australia called, Non Conforming Lenders, they specialise in providing finance for people who do not meet the lending requirements of banks.  Bad Credit applicants fall into this category.

To qualify for a bad credit home loan, there are 2 key specific requirements that are not present with clean credit home loans:

- Applicants must have at least 20% deposit (as well as funds to cover purchasing costs);

- Applicants must have no unpaid defaults or outstanding judgements, part 9 agreements at time of settlement.

Every day we receive inquiries from bad credit applicants looking for a home loan with only the FHOG as a deposit.  No lender in Australia will be able to assist bad credit home buyers without a sizable deposit.  Guarantors can help out if your income is low, but not if you do not have a deposit.

Given that lenders do not offer bad credit home loans beyond 80% of the value of the property , unless you have the balance of funds, you will not qualify for a home loan

Bad credit home loan

Bad credit can reduce your borrowing power, but it certainly won’t keep you from buying a home. Many lenders now offer bad credit mortgages to help people like you afford the home you want without breaking the bank. Of course, you can’t expect the same rates and terms as standard loans, but if you do it right, a bad credit mortgage can help you get that dream home and even improve your credit rating.

Bad Credit Finance works with a number of lenders who will consider applicants with bad credit for a home loan.  Applicants with minor paid defaults may even qualify for a clean credit home loan.

How do they work?

Bad credits mortgages always require some form of security. Usually, this is also the home you are buying; if you default on a credit contract, your lender can sell the property and get his money back. Other assets you can put up are cars, jewelry, bonds, or share certificates. But because you have bad credits, you may still be considered a high-risk borrower and get higher interest rates. Generally, the more security you provide, the better your loan terms will be.

What can they do for you?

Besides letting you afford a home, bad credits mortgages can be used to improve your credit rating. As long as you’re on time with payments and do not default on the loan, they can help you reestablish your credibility and help you get better terms for future loans.

Should you take a bad credit mortgage?

The thing to remember about bad credit mortgages is that they can cost more than standard loans. Before agreeing to any terms, make sure you know the total cost of the loan and that you can afford it. Australian lenders are required to disclose all fees, so don’t agree to pay anything that’s not in the mortgage documents.

If you wish to see whether you are able to qualify for a Bad Credit Home Loan – simply contact us and we will do the rest.

Each and every day dozens of inquiries come in from persons looking for a bad credit unsecured personal loan.

Unfortunately such loans simply do not exist.  It does not matter if your credit defaults are paid or unpaid, the only type of loan that you may qualify for is a secured loan.  Secured loans include home loans and car loans.  It is not possible to use your furniture or any other assets as loan security.  While applicants with some history of bad credit may qualify for a small unsecured loan – these are normally offered by Payday Lenders and are very much short term.

Personal Loans in Australia are very much a bank product.  While they are also offered by some non-bank lenders, there is simply no such thing as non-conforming personal loans.  They require full financials and a clean credit history.  In fact, as many of our clients have found out – banks will decline a personal loan application if you have been making a large number of loan inquiries.  It does not matter that your credit is clean and you have a good job.

Your loan inquiries are reflected on your credit report. Numerous inquiries make you look like an undesirable candidate who has been declined by other lenders.  In finance, perception is reality.

Look after your credit history, and it will look after you!