Almost 20 percent of Australians have a bad credit rating. A bad credit rating means getting a score lower than the average, which is 550. Having a below-average score indicates that the borrower cannot pay because he may be financially unstable.
Most Australians with bad credit ratings are often rejected by the banks and resort to private lending companies offering different loan options. Here are some of them.
Bad Credit Debt Consolidation
There are lending companies in Australia offering bad credit consolidation for affected people. If borrowers have more than one debt to different lenders, they can combine them into one loan with only one repayment per month, possibly with lowered interest. This debt merger will save the borrowers some time and keep them from stress.
Another benefit of consolidating debt is cleaning up the borrower’s credit report since only one loan will appear and the other debts are already paid. The debt consolidation option may help improve the bad credit score of the loan applicant because he will only focus on repaying one loan.
Many Australian entrepreneurs find themselves rejected by banks because of their bad credit ratings. Fortunately, there are still non-bank lenders who can help them expand and grow their businesses. These non-bank lenders offer flexible terms and rates depending on the needs of the borrowers. Bad credit business loan providers may ask for reasons why you’d need financial help. Some of the acceptable purposes include:
- Starting a new business
- Recruiting staff
- Purchasing equipment
- Increasing inventory
- Increasing marketing
- Leasing or buying a new location for the business
- Repairing the business establishment or equipment
- Meeting tax obligations
- Accomplishing short-term financial necessities
Aside from small to big business firms, some private lenders offer business loans for self-employed Australians with bad credit scores. They are allowed to put up or to run their small business. This type of loan is intended for sole traders and freelancers.
No Credit Check Loans
Another option that is available for applicants with bad credit scores is no credit check loans. Surprisingly, this bad credit loan won’t worsen their credit history.
If the loan applicant has a bad credit standing and cannot get an approved loan from banks or any traditional lending institution, no credit check loan is the best alternative. The lenders will need basic information about the borrower, like the source of income. Then, they will approve without looking at their credit history.
No credit check loans are also recommended for Australians who are just beginning to build up their credit rating or those who want to protect their credit history because the private lenders who offer this kind of loan do not conduct investigations about the borrower’s credit rating.
Also, this type of loan is hassle-free and provides fast approval because it is processed online. The borrower will have to fill out the online application forms, upload the requirements, and then wait for approval in just a few hours.