Bad credit loans in Australia are nothing new. More and more Aussies are having trouble when it comes to paying their debts and end up having bad credit. That’s why these types of loans are very popular. That’s why, today, we will learn what a bad credit loan is and who can request it.
Bad Credit Loans in Australia
There are many sources on the Internet stating that more and more Aussies use bad credit loans because of their financial problems. Is it something normal? Should we be concerned? No and no.
While bad credit loans do reflect the financial situation of some people, it doesn’t mean that the whole country is in debt or is facing a financial crisis.
In reality, some of the people using bad credit loans do have a decent monthly gain. But because they requested many banking services, and their bills and debts are not well organised, their credit score has lowered, and the same thing happened with their borrowing power.
The other half are indeed people with a low income and some debts they need to settle. Their only option is placing a request for a bad credit loan.
Bad credit loans in Australia are accessible even for those who do not have a lot of money. However, it is a double-edged sword.
How to Use Bad Credit Loans in Australia
These loans can help you with emergencies, or you can use them to pay unexpected debts. The loan can also help you pay debts that you forgot about. They are also great if you want to invest in your vacation, buy a car, renovate your house or use the money until your next salary comes.
This service is also excellent for those who need to consolidate their loans. While it may sound crazy at first, yes you can use a bad credit loan to combine a lot of debts into a single one.
Also, if you are a business person, you can use these loans as well. You won’t get as much as a standard business loan, but you can buy some office equipment, consumables and other useful things for your company. You can also invest in your working place, car, etc.
These bad credit loans come in two forms, secured and unsecured. The secured ones require a guarantee, something of value like your car or house. If you default on this type of loan, you risk losing the property you used as a guarantee. However, it comes with low interest rates and fees.
Unsecured bad credit loans do not require a guarantee, but they come with high interest rates, high fees, and other costs.
The Drawbacks of Bad Credit Loans
Of course, bad credit loans in Australia do have their own drawbacks. With different lenders, some come with high interest; some come with long lending terms. Usually, these loans attract people who are desperate, and in their desperation, some of them even accept outrageous agreements.
Sure, they get a good loan. However, they will have to pay for it for a long time and it will probably bring them more debts than before. Shady lenders are also a big problem. They offer attractive loans to desperate clients so that they can charge them even more when they cannot repay the loan back.
Who Can Request Bad Credit Loans in Australia?
Most of the time, it depends on the type of loan you are requesting and the lender. Sure, we are talking about bad credit loans, but even those loans need a proper set of documents and other information that prove your eligibility.
To request a bad credit loan, you must be eighteen years of age or older and need to be an Australian Permanent Resident. You will need to provide a valid check or savings account with direct deposit and a document or a payslip that proves that you have a regular income.
Also, some lenders may require that you present your credit file. Not every lender will request that, but it is better to have it. Bear in mind that your application may get refused based on what the credit file says. The listings tell more about yourself and your money than a negative credit score.
So, as you can see, in order to request bad credit loans in Australia, you will need more or less the same documents as with any standard loan. Yes, it may be less restrictive than other services, but you still need to provide some of the essential papers.
If you want to learn more about bad credit loans in Australia, contact us for some free advice and consultation. We don’t prey on people who are in desperate need of a loan because we care about helping you out of your financial rut. We first assess your details to find you the right fit before we get you on the application process. Our team of experts is ready to assist you anyway we can, with services that are suitable for you.