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Borrowers with poor credit records may still be eligible to apply for a loan through Friendly Finance.
Combining all your existing loan accounts can make repayments more manageable. You may even get better loan rates.
Taking a loan may slightly lower your credit score, but timely repayments will boost it over time.
Unlike small loans (which have capped fees instead of interest), bad credit loans and larger loans ($5,000+) carry interest rates. Annual interest rates (APR) can range from 20% to 48%, depending on the lender and loan type.
Bad credit loans often come with a monthly service fee for maintaining the loan. For small amount loans under $2,000, the monthly fee is usually under 4% of the loan amount. For medium amount loans, it can be around $10 to $50 per month.
Establishment fees for bad credit loans is a one-time fee for setting up the loan. Small amount loans come with an establishment fee that is 20% of the loan amount. For medium amount loans, the establishment fee is around $400.
Other Possible Fees for Bad Credit Loans
Late Payment Fees - If a borrower misses a repayment, they may face a late payment fee, which can range from $10 to $35 per missed payment.
Dishonour Fees - If a direct debit payment fails due to insufficient funds, lenders may charge a dishonour fee, typically $10 to $50.
Early Repayment Fees - Some lenders charge an early repayment or exit fee if you pay off your loan before the term ends. However, many short-term lenders do not charge this fee.
Repayment Terms for Bad Credit Loans
Cash loans for bad credit up to $2,000 may have a 16-day to 12-month repayment period. Loans of $2,001 up to $5,000 may be paid over a term of 16 days to 24 months. Loans above $5,000 may have a repayment term of more than 2 years.
Repayments are usually scheduled either monthly, fortnightly, or weekly, with agreed instalments indicated in your loan contract, subject to additional fees in the event of non-payment or late payment.
Always check and consider the repayment schedule before signing any loan contract to prevent yourself from being subjected to late payment and default fees.
Here at Friendly Finance, we aim to provide you the hassle-free experience in acquiring the funds you need.
It will take you less than 5-minutes to accomplish, and the process is 100% online. Skip the inconvenience of multiple loan applications. We’ll do the heavy lifting for you!
Once your application is received, we will search the market for your lender match and you will be notified immediately when they decide that they can offer you a loan.
Always review the details of your contract before signing. You have to make sure you understand all possible fees associated with your bad credit loan.
Lower credit ratings can happen to anyone. And while Friendly Finance is always here to help you secure your needed funds; despite a less-than-ideal credit score. We still want to share a few tips for you to be able to improve your profile.
Pay off all your existing loans
Paying off your debts lowers your risk as a possible borrower. Work on settling all your debts or if possible, combine them under one account for easier repayments.
Check your credit report for possible errors
If you discover an inaccuracy in your credit report, you must first notify the credit reporting organisation so that the situation can be investigated. If the error is confirmed, it will be fixed and updated in your credit report at no cost.
Create and stick to your budget
By keeping your expenses on track, you will prevent unnecessary shortages that could result in having to apply for additional loans.
Explore your options for bad credit loans
Get StartedAm I eligible for a bad credit loan?
- Over 18 years of age
- Receiving regular income. Centrelink benefits should be no more than 50% of your total income.
- Active contact details such as email and mobile phone.
- Australian resident
Bad Credit Loans: Frequently Asked Questions
Don’t see what you had in mind? You can reach out to us via our contact form or email us at info@friendlyfinance.com.au
What are the Pitfalls of a Bad Credit Loan
High-interest rates: They can be subject to higher interest rates than you would get with an average personal or secured loan.
Chance for loan rejection: There is still a chance your loan application will be rejected. This could further lower your credit score since it will leave a hard enquiry record on your credit report.
Can I Apply without Providing Bank Statements?
No. Lenders require access to your bank account to check for your income transactions within a 90-day period. Even for bad credit loans, this is a legal requirement to assess your loan affordability and to ensure that you can repay the loan on time. The bank account will also serve as the disbursement channel for the loan.
Can Loans for Bad Credit Affect your Credit Score?
The effect of a bad credit loan on your credit score will depend on your repayment behaviour. If you pay off your loan on time, your credit score will improve in the long run. It may initially reduce the score by a couple of points since your debt-to-income ratio will shift and you will owe more money.
However, if you meet your loan payments, your credit will improve due to positive financial behaviour. As a result, the chances of obtaining favourable lending conditions in the future will increase.
If you do not make the necessary payments on time or if you default on payment, bad credit loans will lower your score since the lender may report your default to credit reporting agencies. This default will show in your credit report and could deter future lenders.
How Long Does a Bad Credit Loan Stay on Your Cedit Report?
A credit report is a summary of how you have managed credit accounts, including the types of accounts and your payment history, as well as some additional information that your lenders and creditors submit to credit agencies.
This is an important indicator for the lenders on the risk of lending you any amount of money. A bad credit loan can be on your credit report for up to 10 years. Late payments may stay up to 7 years on your credit report from the date of delinquency.
