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Bad Credit Loans in Australia — Options When Traditional Loans Are Hard to Get
Compare bad credit loans from $300 to $15,000 through Friendly Finance's lender panel. One application. Decision in minutes. All credit histories considered.
Friendly Finance is a credit broker, not a lender. ACL 487316. Approval is subject to each lender's assessment — it is never guaranteed.
What is a bad credit loan?
A bad credit loan is a personal loan designed for Australians with a poor or limited credit history — people who may have been knocked back by a bank because of past defaults, arrears, or a thin credit file. If a less-than-perfect credit history has made it tough to get approved for a traditional loan, bad credit loans offer an alternative way to access finance for urgent expenses, debt consolidation, or essential purchases. Many lenders in the Friendly Finance panel look at more than just your credit score — they assess your current income and expenses to work out what you can genuinely afford. In return, these loans often carry higher fees or interest than a mainstream personal loan, to reflect the added risk to the lender. We compare a range of options so you can understand your borrowing costs before you apply.
Bad credit loans in Australia are consumer credit products regulated by ASIC under the National Consumer Credit Protection Act 2009.
How do bad credit loans work in Australia?
Bad credit loans fall into a few categories depending on the amount you borrow — and the rules and costs differ for each. Here's how amounts, terms and cost structures compare.
Loan Amounts & Terms
| Loan category | Amount | Typical term | Cost structure |
|---|---|---|---|
| Small (SACC) | $300 – $2,000 | 16 days – 12 months | No interest; capped fees (20% establishment + 4%/mo) |
| Medium (MACC) | $2,001 – $5,000 | 13 – 24 months | Capped $400 establishment fee + interest, within a 48% annual cost cap |
| Large personal | $5,001 – $15,000 | 13 months – 3 years | Interest-bearing, up to a 48% p.a. cap under the National Credit Code |
How Repayments Are Structured
Repayments are generally aligned to your pay cycle — weekly, fortnightly or monthly — and collected by direct debit from your nominated account. Under responsible lending rules, lenders must set repayments at a level you can afford. Always read your contract and check the repayment amount, schedule and any fees for late or missed payments before you sign.
Here's how a small ($1,000) bad credit loan could look across different pay cycles, using the capped-fee structure that applies to amounts under $2,000.
| Pay Cycle | No. of Repayments | Est. Repayment Amount* | Total Cost |
|---|---|---|---|
| Weekly | 26 | ~$55.40 | ~$1,440 |
| Fortnightly | 13 | ~$110.77 | ~$1,440 |
| Monthly | 6 | ~$240.00 | ~$1,440 |
*Based on a $1,000 loan: 20% establishment fee ($200) + 4% monthly fee over 6 months ($240) = $1,440 total. Indicative only — actual amounts depend on your lender and loan agreement.
Bad Credit Loan Repayment Estimator
Get an estimate of your costs before you apply. Figures are illustrative — based on ASIC maximum fee caps.
What are the fees for bad credit loans?
Because bad credit loans carry more risk for lenders, they generally cost more than a mainstream personal loan. Australia caps these costs by law. Here's what you may be charged.
| Fee / charge | What it is | Typical amount |
|---|---|---|
| Interest (loans over $2,000) | Annual cost of borrowing on medium and larger loans | Commonly 20%–48% p.a. (48% is the legal cap) |
| Establishment fee | One-off set-up fee | SACCs: up to 20% of the amount · MACCs: up to $400 |
| Monthly / service fee | Ongoing account-keeping fee | SACCs: up to 4% of the amount per month · larger loans: ~$10–$50/mo |
| Late payment fee | Charged if you miss a repayment | ~$10 – $35 per missed payment |
| Dishonour fee | Charged if a direct debit fails | ~$10 – $50 |
| Early repayment / exit fee | May apply if you pay out early | Varies; many short-term lenders charge nothing |
Am I eligible for a bad credit loan?
Bad credit doesn't automatically rule you out. To be matched with a lender through Friendly Finance, you'll generally need to meet these minimums:
How to apply for a bad credit loan through Friendly Finance
Our application is 100% online and takes under 5 minutes. One form matches you across our lender panel — no need to apply to each lender separately.
Types of bad credit loans available
"Bad credit loan" covers several related products. Here's how they map to what you might need.
Bad credit loans vs other borrowing options
A bad credit loan isn't the only path. Use this to weigh it against the alternatives.
| Feature | Bad Credit Loan (via Friendly Finance) | Bank Personal Loan | Credit Card | NILS (Free Loan) |
|---|---|---|---|---|
|
Loan amount
|
$300 – $15,000
|
$5,000 – $50,000+
|
Up to your credit limit
|
Up to $2,000
|
|
Bad credit accepted
|
Often yes
|
Rarely
|
Rarely
|
Yes
|
|
Assessment basis
|
Income & affordability
|
Credit score + income
|
Credit score + income
|
Income & need
|
|
Speed of decision
|
Often minutes
|
1–5 business days
|
Instant (if existing)
|
1–2 weeks
|
|
Cost
|
Higher (capped by law)
|
Low (approx 7–20% p.a.)
|
Medium (approx 20–25% p.a.)(approx 7–20% p.a.)
|
Free (0%)
|
|
Best for
|
Poor credit, urgent or mid-size needs
|
Strong credit, larger planned costs
|
Ongoing flexible credit
|
Ongoing flexible credit
|
Pros and cons of bad credit loans
Alternatives to bad credit loans
Some of these are free or significantly cheaper — worth exploring first.
Bad credit loans: frequently asked questions
Can't find your answer? Email us at info@friendlyfinance.com.au or contact our team
Can I get a loan with bad credit in Australia?
Yes, in many cases. Several lenders in the Friendly Finance panel assess your current income and expenses rather than relying on your credit score alone, so borrowers with past defaults or a thin credit file may still qualify. Because lenders are legally required to conduct responsible lending checks, approval is never guaranteed.
Yes, in many cases. Several lenders in the Friendly Finance panel assess your current income and expenses rather than relying on your credit score alone, so borrowers with past defaults or a thin credit file may still qualify. Because lenders are legally required to conduct responsible lending checks, approval is never guaranteed.
How much can I borrow with a bad credit loan?
Through Friendly Finance you can be matched for amounts from $300 to $15,000, depending on the lender and your assessed ability to repay. Amounts under $2,000 are Small Amount Credit Contracts with capped fees and no interest; larger amounts are interest-bearing personal loans.
Through Friendly Finance you can be matched for amounts from $300 to $15,000, depending on the lender and your assessed ability to repay. Amounts under $2,000 are Small Amount Credit Contracts with capped fees and no interest; larger amounts are interest-bearing personal loans.
Can I apply without providing bank statements?
No. Lenders need read-only access to around 90 days of your bank transactions to verify your income and assess affordability — this is a responsible lending requirement, even for bad credit loans. Your account also serves as the channel for receiving the funds.
No. Lenders need read-only access to around 90 days of your bank transactions to verify your income and assess affordability — this is a responsible lending requirement, even for bad credit loans. Your account also serves as the channel for receiving the funds.
Will a bad credit loan affect my credit score?
It depends on your repayment behaviour. Applying may add a credit enquiry to your file. Repaying on time can improve your score over the following months, because your last 24 months of repayment history are visible to lenders under Comprehensive Credit Reporting. Missing payments or defaulting will lower your score, and a default can be listed for 5 years.
It depends on your repayment behaviour. Applying may add a credit enquiry to your file. Repaying on time can improve your score over the following months, because your last 24 months of repayment history are visible to lenders under Comprehensive Credit Reporting. Missing payments or defaulting will lower your score, and a default can be listed for 5 years.
How long does a default stay on my credit report in Australia?
Under the Privacy Act 1988, a default stays on your credit file for 5 years from the date it was listed — and paying the debt doesn't remove it early (it only updates the status to "paid"). For context: credit enquiries also stay 5 years, repayment history and late-payment markers stay 2 years under Comprehensive Credit Reporting, court judgments stay 5 years, and serious credit infringements ("clear-outs") stay 7 years. Bankruptcy stays 5 years from discharge, or 2 years from when it ends, whichever is longer.
Under the Privacy Act 1988, a default stays on your credit file for 5 years from the date it was listed — and paying the debt doesn't remove it early (it only updates the status to "paid"). For context: credit enquiries also stay 5 years, repayment history and late-payment markers stay 2 years under Comprehensive Credit Reporting, court judgments stay 5 years, and serious credit infringements ("clear-outs") stay 7 years. Bankruptcy stays 5 years from discharge, or 2 years from when it ends, whichever is longer.
What are the pitfalls of a bad credit loan?
The main ones are cost and risk. Bad credit loans generally carry higher fees or interest than mainstream credit, and there's still a chance of rejection — which leaves a hard enquiry on your file. Taken on without a clear repayment plan, a higher-cost loan can deepen financial stress rather than relieve it. Always check the total cost and repayment schedule before signing.
The main ones are cost and risk. Bad credit loans generally carry higher fees or interest than mainstream credit, and there's still a chance of rejection — which leaves a hard enquiry on your file. Taken on without a clear repayment plan, a higher-cost loan can deepen financial stress rather than relieve it. Always check the total cost and repayment schedule before signing.
Can I get a bad credit loan on Centrelink?
In many cases, yes — provided your Centrelink payments make up no more than 50% of your total monthly income and you can show you can afford the repayments. If you rely entirely on Centrelink, a free option such as a Centrelink Advance Payment or the NILS scheme may suit you better.
In many cases, yes — provided your Centrelink payments make up no more than 50% of your total monthly income and you can show you can afford the repayments. If you rely entirely on Centrelink, a free option such as a Centrelink Advance Payment or the NILS scheme may suit you better.
How is Friendly Finance different from a lender?
Friendly Finance is a licensed credit broker (ACL 487316), not a lender. We don't make credit decisions or lend money — we match your single application to suitable lenders on our panel, who then assess and approve or decline your application and provide the funds. Our matching service is free to use. Friendly Finance is a trading name of Marketplace Finance Pty Ltd (ACN 608 607 227).
Friendly Finance is a licensed credit broker (ACL 487316), not a lender. We don't make credit decisions or lend money — we match your single application to suitable lenders on our panel, who then assess and approve or decline your application and provide the funds. Our matching service is free to use. Friendly Finance is a trading name of Marketplace Finance Pty Ltd (ACN 608 607 227).
Bad credit? Let's find your options.
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