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FACT CHECK

What you should know about bad credit loans.

  • 1. Loans for Credit Defaults

    Borrowers with paid or unpaid defaults can still qualify for a home loan with specialist lenders.

  • 2. Discharged Bankruptcy Considered

    Some lenders offer home loans as soon as a borrower is discharged from bankruptcy.

  • 3. Debt Consolidation Options

    Bad credit home loans can help combine multiple debts into one manageable repayment.

  • 4. Flexible Lending Criteria

    Non-conforming lenders assess applications based on individual circumstances, not just credit scores.

  • 5.Higher Interest Rates Apply

    Due to the increased risk, bad credit home loans often come with higher interest rates.

Find Out Your Eligibility Today

Unsure if you qualify? Let us assess your situation and explore the “bad credit home loan” options available to you.

Book a free assessment
HOME LOAN OPTIONS FOR BAD CREDIT BORROWERS

Got a bad credit history? Explore these options with us!

Home loan with defaults

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Tax debt home loan

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Part IX debt agreement

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Discharged bankrupt home loan

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Debt consolidation home loan

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Why Choose US

Your Trusted Home Loan Partner

At Everrich Finance, we understand challenges that come with getting a home loan when you have bad credit history.

Book a free assessment

Professional Guidance

Our experienced advisors specialise in complex financial cases with no upfront savings or a deposit, including those turned away by banks, ensuring you get the right loan solution.

Personalised Support

From application to settlement, our brokers provide tailored advice and hands-on guidance, making your home loan journey a streamlined one.

Competitive Rates

We negotiate sharp interest rates on your behalf, helping you secure the right home loan tailored to your needs.

More Options

With access to over 30 lenders, we compare multiple loan products to find the perfect fit—whether you're in Australia or overseas.

We compare loans from a wide range of lenders

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CORE ESSENTIALS

Bad Credit Home Loans Simplified

A. Types of Bad credit home loans

1. Home loan with defaults

These types of loans are offered to borrowers who have defaults on their credit file. Banks generally categorize defaults by:
  • Paid defaults: Defaults that you’ve paid in full.
  • Unpaid defaults: Defaults that you haven’t paid in full.
Default are record on your credit file that shows that you have an overdue account such as a personal loan, credit-card bill, buy now pay later facilities, utility bill or phone bill. Overdue payments are when payments are not made for more than 60 days. Having a default on your credit file and credit score less than 550 will most like get you declined from most major banks.

2. Discharged bankrupt home loan

These types of loans are offered to borrowers who were bankrupt and are now discharged from their bankruptcy. There are financiers that will lend you money to buy a property the day after your bankruptcy is discharged.
Once you are discharged, you are no longer bankrupt and no longer required to have limited assets and no overseas travel. It also means that you’re able to apply for credit again.

3. Part IX debt agreement

These types of loans are offered to borrowers who entered a Part IX Agreement and have completed the agreement. So if you can’t pay your debts, you have the option of seeing an insolvency practitioner that can assist with your debt agreement between you and your creditors or financiers.
Once the debt agreement is met, you’ll be discharged from the agreement. A Part 9 agreement will appear on your credit report for five years from the start date of your agreement. This can sometimes be longer and may affect your ability to obtain credit.
There are lenders who will consider your mortgage application if you have a completed Part IX Agreement on a credit file.

4. Tax debt home loan

These loans are offered to borrowers who have a large tax debt with the Australian Taxation Office. Generally, the ATO debt is added to the mortgage, leaving the borrower clear from any ATO debt. ATO debt is actually very common.

5. Debt consolidation home loan

We can help with debt consolidation to help combine small personal loans, credit card, business loan, tax debt and car loan into 1 loan repayment. By creating one repayment it will lower your monthly repayment, potentially get you a lower interest rate and reduce total fees payable across multiple facilities.

B. How much can I borrow if I have bad credit?

Here’s how different scenarios might affect your borrowing capacity.
  • Small paid default: With small defaults under $500 paid over six months ago, you could borrow up to 90% loan to value ratio, or in some strong cases, up to 95% of the property value.
  • Multiple small paid defaults: If you have under $1,000 in paid defaults from financial institutions (like banks), and under $500 from non-financial institutions (like phone companies), you might be able to borrow up to 85%, or possibly 90%, of the property’s value.
  • Moderate paid defaults: With up to $3,000 in paid defaults, options will depend on your circumstances. In general you could borrow up to 80% of the property value with a prime lender and up to 90% with a specialist lender.
  • Large paid defaults: For larger paid defaults from $3,000 to $500,000, options are assessed on a case-by-case basis. A strong explanation and solid evidence can lead to borrowing up to 90% of the property value with a specialist lender.
  • Unpaid defaults: If you have any unpaid defaults, you can borrow up to 90% of the property value with a non-conforming lender, but most lenders will require the defaults to be paid before approving the loan.
  • Judgements or court writs: If you have any judgements or court writs, then you can borrow up to 90% of the property value with a non-conforming lender.
For a clear understanding of how these conditions might affect your loan situation, we please feel free to Contact us: (03) 9034 5223 or contact us online.

C. Options for interest rates on bad credit home loans

Home loan with bad credit usually means higher rates, because lenders see it riskier business. The exact rate can change depending on how the lender looks at your credit history. Loan options
  • Fixed-rate loans: Your interest rate is set (fixed) for the duration that you choose. This can be great for budgeting because you know exactly how much your payments will be. But these rates might start off higher than variable rates, especially for bad credit loans.
  • Variable-rate loans: Your rates will fluctuate depending on market conditions, so your repayment can change over time. This might give you a lower rate to start, but there’s the risk that it could go up later.
  • Loan duration: The term of your loan can also influence the total interest payable to the lender. So the shorter the loan terms means higher monthly payments but lower total interest over the life of the loan. On the contrary, the longer loan term the repayments is lower, increasing the total interest paid.
Speak to us today on (03) 9034 5223 or enquire online.

D. Tips to qualify for a bad credit home loan

1. Choose the Right Lender While major banks have stricter criteria, non-conforming and specialist lenders often can accommodate a lending solution that meets your needs.
2. Understand your credit file: Familiarize yourself with your credit history and be able to explain adverse aspects on your credit file.
3. Manage Your Finances Prudently Avoid additional negative listings on your credit file by:
  • Paying your debts on time.
  • Maintaining open communication with lenders.
  • Making some payment, even if not the full amount, towards your debts.
  • Clearing any existing defaults.
4. Timing: If you have an adverse listing it is important to find out from the lender and credit reporting agency when the adverse listing will be removed. Before applying for a loan it may be beneficial just to wait. In some instances this may mean a more favourable loan term, accessibility to more funders and lower fees. In an upward trending market, purchasing property earlier might be beneficial in terms of building equity.
5. Seek professional advice: If you’re unsure about the most beneficial course of action or need assistance in repairing your credit file. We can help assess when it’s the right time to apply or if it’s more beneficial to wait for an improvement in your credit score.

E. Common mistakes to avoid when applying for a bad credit home loan

When you apply for a home loan with bad credit, it’s important to be extra careful. These mistakes can make it even harder for you to get your loan or affect your finances in the long run. Here’s what you should watch out for:

Mistake 1: Not checking your credit report

Before you start your application you can review your credit report. Sometimes, there are mistakes or old information that could make your credit look worse than what it is. Fixing these can help your application look more attractive to the lenders.

Mistake 2: Applying with multiple lenders at once

Applying with multiple lenders at the same time can limit your chances of approval. Every time you apply, it reduces your credit score. It is recommended to do your homework, compare different lenders, and choose the most suitable one for your situation. Or speak to a specialist that can review this for you.

Mistake 3: Ignoring your current debts

Any credit facility you engage into needs to be maintained well to avoid further deterioration in your credit score. Keeping up to date with existing debts, like credit-card bills or other loans is critical to provide you with creditibility that you are now in a position to take on more debt. Missing payments or paying late can further deteriorate your credit score, making it harder for you to obtain a loan.

Mistake 4: Overlooking loan terms

Make sure you understand everything about the loan you are considering. This includes how much interest you will pay, any fees involved, discharge fees, early repayment fees.

F. Why Choose Everrich Finance?

At Everrich Finance, we understand challenges that come with getting a home loan when you have bad credit history. Here are some reasons why you should consider us to help with your loans:
  • We are familiar with bad credit scenarios and specialize in them, so that you can be rest assured that you will get the right home loan based on your situation.
  • We can service your needs anywhere in Australia.
  • We have track record in getting approvals for challenging loans.
  • With over 30 lenders at our disposal, we navigate through numerous loan options to secure the most suitable solution for your situation.
  • Benefit from free upfront property valuations and free credit reports to assist you in making a more informed decision.
  • Being committed to your financial goals, we will always ensure that your financial interest is always our top priority.
  • Our post-settlement team is always ready to assist, advise, and support you throughout your home loan journey.
We have a team of dedicated bad credit mortgage brokers with many years of experience. Our senior brokers have worked in the bank for over 7 years and know exactly how to build a strong case for bad credit home loans.
Contact us: (03) 9034 5223 or contact us online and we can help you with any enquiries you might have around bad-credit mortgage.
BAD CREDIT LOAN FAQ

Bad Credit Loans: Your Questions Answered

  • 1. Which lender can help me?

    Specialist lenders, also known as non-conforming lenders, are more flexible than major banks. These lenders recognize that people with bad credit are looking for a second chance. The non-conforming lenders that we deal with are:
    1. Bluestone Mortgages
    2. Pepper Money
    3. La Trobe Financial
    4. Resimac
    5. RedZed Lending Solutions

  • 2. How do I refinance a home loan with bad credit?

    If you currently have a bad credit home loan, you can refinance with a non-conforming lender when:
    1. You owe 80% or less of your property’s value
    2. Your defaults are no showing on your credit file anymore
    3. Your defaults have been paid off
    4. You can demonstrate your income
    5. You have been up to date with all of your repayments for the last six months.

    Please reach out to our team to discuss more about bad credit home loan refinance options available to you.

  • 3. What information is recorded on my credit file?

    Your name, date of birth, current address, previous address, driver’s license number, employer and previous employer are information stored on your credit file. All the loans that you have applied for in the last 5 five years are a part of your credit file and they come up as “Enquiries”. Other aspects, such as court judgements, court writs and bankruptcy history are saved on your credit file.

  • 4. How much deposit do I need for bad credit home loans?

    The deposit required for bad credit home loans varies depending on the lender and your personal circumstances. Generally, a larger deposit will mean more suitable terms, more suitable rates and increase chances of approval. Our team can provide more suitable assistance and advice around this.

  • 5. What Are The Required Documents During The Application Process?

    The following documents will be required for bad credit home loans:
    1. Proof of Identity: Drivers license and passport
    2. Proof of Income: Recent payslips, tax returns, or other official documents evidencing your earnings.
    3. Bank Statements: Statements showing your financial history and spending patterns.
    4. Details of Existing Debts: Information on current loans, credit cards, or other financial obligations.
    5. Additional Documents: Will depend on lender criteria
    Your mortgage broker can guide you through the document requirements.

  • 6. How long is the application process?

    On average, it may take several weeks to complete the process, including application submission, assessment, and approval. Delays can occur if additional information is required or if there are complexities in your application.

  • 7. Can first-home buyers get a bad credit home loan?

    Yes, first-home buyers with bad credit can still get a loan. Non-conforming lenders may consider applicants with bad credit, but eligibility criteria and rates will be d=higher than a standard home loan. It is recommended to speak to one of our adviser to get more assistance.

Testimonials

Love from Clients

As first home buyers, the process was straight forward, we were kept in the loop the whole time, and every question (even the silly ones) were answered timely without judgement. We learnt…

Rebecca Giarrusso
First Home Owner

Great service, timely manner, provided excellent service when we purchase our first home.

Yunfang Yu
First Home Owner

We cannot recommend James highly enough as a mortgage broker. He is patient, informative and quick to respond. He made the entire process seamless and we cannot thank him enough…

Jess Tang
Home Owner

James and his team at Everrich are the best team you could ask for when you are looking at buying a property. My partner and I buy were able our…

Thomas Vo
First Home Owner

When I bought my first home, I had no idea about home loan. The team explained me every thing about home loan and offered me various choices compared to other brokers…

Sora Gwak
First Home Owner

Purchasing my first property would not have been possible without the help of Murray at Everrich Finance. He was extremely thorough in every step of the application process and always…

Minh Vuong
First Home Buyer

Find Out Your Eligibility Today

Unsure if you qualify? Let us assess your situation and explore the most beneficial "bad credit home loan options" available to you.

Book a free assessment