It can be difficult to get a loan from a bank with a bad credit history. And while payday lenders usually don't require a good credit score to take out a loan, most only offer finance of up to $2,000. However, it is possible to get a $5,000 loan with bad credit, though be aware that there are high costs that come with these loans, including the maximum establishment and monthly fees that can be charged, plus high late payment and default fees
If you're experiencing financial hardship and would like to speak to someone for free financial counselling, you can call the Financial Counsellors hotline on 1800 007 007. It is open from 9:30am to 4pm, Monday to Friday. When comparing short term loans, ensure you take into consideration any fees, charges and rates you may be charged. It's important to weigh up all your options before applying for any form of credit.
⚠️ Warning about Borrowing
Do you really need a loan today?*
It can be expensive to borrow small amounts of money and borrowing may not solve your money problems.
Check your options before you borrow:
For information about other options for managing bills and debts, ring 1800 007 007 from anywhere in Australia to talk to a free and independent financial counsellor
Talk to your electricity, gas, phone or water provider to see if you can work out a payment plan
If you are on government benefits, ask if you can receive an advance from Centrelink: Phone: 13 17 94
The Government's MoneySmart website shows you how small amount loans work and suggests other options that may help you.
* This statement is an Australian Government requirement under the National Consumer Credit Protection Act 2009.
How do $5,000 bad credit history loans work?
Bad credit loans work in a similar way to standard personal loans, except with different fee and interest rate structures. These loans are more expensive because the lenders need to offset the risk of lending to those with adverse credit histories. However, bad credit history loans up to $5,000 have capped fees and charges.
With bad credit loans, an applicant's credit history may or may not be checked. This will be disclosed by the lender beforehand. Most lenders will check a person's credit history to ensure that they are reasonably able to repay the loan, but lenders that advertise bad credit loans will not disqualify applicants based on credit history defaults.
$5,000 loans with bad credit interest and fee caps
One-off establishment/application fee
Maximum annual interest rate of 48%, which includes all other fees and charges
Compare $5,000 bad credit history loan options below
Updated March 30th, 2020
How much do $5,000 loans with bad credit cost?
When borrowing from a non-authorised deposit-taking institution, which is basically any lender that isn't a bank, credit union or building society, the following charges apply:
Loans under $2,000. These charge a 20% establishment fee and a 4% monthly fee. Both fees are calculated using the loan principal.
Loans of $2,001 to $5,000. These loans are repaid over 16 days up to 2 years. You cannot be charged more than a one-off establishment fee of $400 and a maximum annual interest rate of 48% p.a. which includes all other fees and charges.
Loans over $5,000. These cannot charge more than 48% p.a. including all fees and charges.
Which companies offer bad credit loans up to $5,000?
There are various options when it comes to finding up to a $5,000 loan with bad credit history. Click through to the review page to find out more details on these loan products.
Find out more
Fair Go Finance
$500 to $10,000
Earn at least $500 per week
Only considers Single Parent, Family Tax Benefit and Carer's Allowance for Centrelink income
Employed on a casual, part-time or full-time basis
Self-employed applicants must earn at least $35,000
Centrelink benefits cannot make up more than half of someone's income
Bad credit and self-employed applicants are considered
$500 to $5,000
Bad credit, Centrelink and unemployed applicants are considered
$2,001 to $5,000
18 years old or over
Good to Go Loans
$500 to $5,000
18 years old or over
Receive regular income
Centrelink borrowers considered
Up to $4,600
18 years old or over
Earn over $750 per week
Be employed for at least 3 months
How bad credit history affects taking out a loan
There are some important points to consider before applying for a $5,000 loan with bad credit.
Check the eligibility criteria before applying Lenders have set eligibility criteria that can be checked via the Finder review pages. Check the criteria online, if it's still not clear, call the lender to discuss the situation.
Order a credit report A credit report is the most up-to-date and accurate recording of a person's financial history and this is what lenders use to judge creditworthiness. You can order a full credit report for free with Finder.
Compare options before applying It's important to remember that every application for credit you make shows up on your credit history. Therefore, it's best not to make numerous applications at the same time. It's also important to be crystal clear on the fine details of the loan before making an application or taking out a line of credit.
Generally, if someone has any black marks on their credit file (defaults or bankruptcies, for example) it's safe to assume they have some degree of "bad credit" history. However, as the degree of "bad credit" varies between people, one of the easiest ways to check if you have a bad credit history is by checking your credit report and credit score. You can do this for free with Finder.
When checking your credit report, you should look out for bad credit listings such as defaults, bankruptcies, late payments and excessive credit enquiries. Your credit score will also give you a good indication of your standing. The credit score you receive from Finder is from credit reporting bureau Experian, and will be a number between 0 and 1,000. You can see a breakdown of the credit score ranges below from both Experian and Equifax – the lower your credit score, the more likely it is that you have bad credit.
What are the risks of no credit check loans?
Unreputable lenders. Check the lender has a credit licence and is not charging you more than ASIC allows. The lender should be easily contactable.
Unaffordable repayments. Consider the size of the regular repayments and ensure the loan is able to be repaid during the loan term. If not, extra fees apply to extend it. Be careful, since repayment periods for these kinds of loans tend to be shorter than regular loans.
Multiple applications. Every loan application shows up on credit reports. While lenders might not consider credit history, several applications within a short period can have a negative impact on your credit score moving forward.
Check rates and fees. Establishment and monthly fees are capped, so be wary of lenders quoting prices beyond the legal maximum amounts. Be crystal clear on what will be charged for late payments or a default on the loan. The total cost of the loan matters here - lenders can charge interest rates on top of everything else.
Long-term repercussions and legal issues. Once the loan agreement is signed, the customer is bound to its conditions until the loan and any associated rates and fees have been paid. Typically these loans are unsecured, which means that the lender can initiate legal proceedings against the customer if they can't repay.
Options for an unsecured $5,000 loan with a good credit rating
People who don't have a bad credit history are likely to be eligible for a loan from a bank, credit union or standalone lender at a more competitive rate than bad credit loans. Good credit applicants may also find it easier to qualify for unsecured finance.
Updated March 30th, 2020
What to remember when comparing $5,000 loans
Online applications The convenience of online application forms and quick approval systems can save time. They also offer the opportunity to compare a range of credit providers.
Lenders consider your current financial situation over your credit score It's common to have difficulty being approved for a personal loan from many credit providers with a bad credit history. However, opting for a bad credit lender gives you access to lenders that look at your current financial situation when considering you for a loan. However, it's important to remember that bad credit lenders generally charge high interest and fees.
Repayment terms Some lenders may offer options of how to make repayments and direct debit repayments are offered by most lenders.
Bad credit loans are high cost Due to the high risk of this loan, the lender will usually charge higher fees. However, keep in mind fees are capped by the Australian Securities and Investments Commission (ASIC).
Loans over $2,001 come with high interest While loans under this amount do not come with interest rates (only set fees), loans above this amount come with rates maxed at 48% p.a.
Disreputable lenders operate in the bad credit loans space There are many disreputable lenders operating online that prey on people with bad credit, so it's important to thoroughly research the lender in question and consider if a bad credit loan is the best approach to the situation.
Frequently asked questions about bad credit loans
Some of the questions we get asked the most often in regards to $5,000 loans with bad credit include:
How do I apply for a $5,000 bad credit loan?
You can apply to any of the lenders on this page by clicking "Go to site". This will take you directly to the lender's website, where you can submit an online application
What happens after I send my application?
This will differ between lenders, but typically applicants receive a notification of approval (or not) along with further instructions for the next steps.
Are my details secure?
When you apply for a bad credit loan online up to $5,000, your details are securely transmitted over an encrypted connection. The majority of sites you apply at use 128-bit SSL encryption to ensure your details are safe and secure.
Can I get a $5,000 loan if I'm unemployed?
When an institution lends you money, it wants to be certain that you can repay the debt within the allocated timeframe. For people who are not employed, their income may be limited unless they are receiving Centrelink benefits. If the majority of income comes from Centrelink payments, they may still be eligible for a personal loan. Please read our guide to getting a loan on Centrelink before applying.
Matt Corke is the head of publishing in Australia for Finder. He previously worked as the publisher for credit cards, home loans, personal loans and credit scores. Matt built his first website in 1999 and has been building computers since he was in his early teens. In that time he has survived the dot-com crash and countless Google algorithm updates.
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