Loans for bankrupt

Loans for bankrupts

Information verified correct on December 4th, 2016

Bankruptcy doesn’t have to be the end of the road. Here’s how to get a personal loan after you’ve been declared bankrupt.

Filing for bankruptcy is not an easy step for anyone to take. However, the most difficult process usually comes when you’re trying to rebuild your finances, your credit and your life. During your bankruptcy or after you are discharged you may find yourself in need of a loan – but are there lenders who will be willing to consider you for a second chance?

Can I get a loan if I’m bankrupt?

Yes, you are able to get a loan if you are a discharged bankrupt or even if you are currently bankrupt. You will be more limited in terms of the lenders you have to choose from, and the fees and rates will also be considerably higher on bankrupt loans. You may also be required to attach an asset as security or apply with a guarantor. Find out about your loan options below and see what you might be eligible for.

Before you apply for a loan while bankrupt…

  • As your assets and income may have been affected by bankruptcy, deciding whether or not you can afford the repayments is an important consideration. What will your repayments be and how will they work with your budget?
  • Applying for a loan when you’re in any challenging financial situation isn’t a decision that should be taken lightly. This is especially true when you are bankrupt. Consider why you are taking out the loan and if there is any other way you can pay for what you need.
  • Speaking to a free financial counsellor might be an option for you to consider before you apply for any financial product. You can give one a call on 1800 007 007.

What kind of bankrupt loans are available?

If you’re in need of financing and you’re currently bankrupt or have bankruptcy listed on your credit file, the following loan options might be an option for you:

  • Payday loan. These are short term loans up to $2,000 with repayment terms between 16 days and one year. You can also find loans up to $5,000 or even $10,000. Lenders have flexible lending criteria, and while they won’t all consider bankrupt applicants, some will.
  • Personal overdraft. Your current bank may be willing to approve you for a small personal overdraft if you have a good history with it.
  • Personal loan. Bad credit personal loans are available from lenders, some for large amounts.
  • Business loans. If you’re bankrupt you still may be able to apply for a business loan. These loans are larger, some for amounts up to $500,000, and are designed to finance a range of business purposes.
  • Car loan. Secured loans can be easier to be approved for than car loans as they are less of a risk to a lender. You can consider a bad credit car loan and attach your newly purchased vehicle to the loan as security

How can I be approved for a bankrupt loan?

While there are lenders who will consider applicants who are or who have previously been bankrupt, filling out the application is not all it takes to be approved. Here are some of the criteria that will be in place when you're considered for a bankrupt loan:

  • Employment. You may be required to be employed, although unemployed loans are available. Different criteria are in place, for instance, your employment may need to be regular and ongoing and you may not be accepted if you're self-employed or part-time, etc. Check what the lender’s restrictions are before applying.
  • Centrelink. While you may still be considered for a loan if you receive Centrelink payments, lenders often have restrictions as to what percentage of your income can be made up of benefits (usually 50% if the restriction is in place). Another common restriction is that your loan repayments can’t exceed a certain percentage of your Centrelink income (typically 20%).

Here's how to get a home loan if you're a discharged bankrupt

  • Income. How much do you earn? Lenders often have minimum income requirements in place. They may allow your income to be from employment and Centrelink, or may need it to be solely from regular employment, but it will usually need to be over a certain amount per week or month.
  • Assets. For bankrupt loans, the lender may require you to secure an asset to the loan as a guarantee in case you default on the loan.
  • Ability to manage your repayments. This is the main requirement lenders have when considering you for a loan. Does your income allow you to easily manage your repayments after taking into account your liabilities and debts? If your repayments will be manageable and you meet the lender’s other criteria, you will be able to apply.
  • Guarantor. If you don’t meet the lender’s criteria, you may be able to apply with a guarantor to increase your chances of being approved.

What options for I have for a loan while bankrupt?

BrandDoes it approve bankrupt applicants? Criteria
Australian Lending Centre Yes You're able to apply. Standard lending criteria will apply.
Cash ConvertersYes You can be approved if you've been discharged from a Part 9 Debt Agreement.
Cash TrainYes You can apply as long as you meet the minimum requirements.
Dollars DirectNo You cannot apply.
Fair Go FinanceYes You need to have entered into bankruptcy at least 12 months previously.
FerratumYes No credit checks will be conducted when you apply.
Loan RangerNo You cannot apply.
Max FinanceYes You can apply if you are a discharged bankrupt.
MyCashFinanceYesIf you're bankrupt you are not eligible but can apply with a guarantor, if you are a discharged bankrupt you can apply.
NimbleNoYou cannot apply.
Needy MoneyYesYou're able to apply.
Payday 24/7YesNo credit checks will be conducted when you apply.
Rapid FinanceYesYou can apply, your application will be judged on a case-by-case basis.
Sunshine LoansNoYou cannot apply if you are a current bankrupt.
Wallet WizardYesYou can apply if you're a discharged bankrupt.
Yes LoansYesCurrent or discharged bankrupts can apply.
Rates last updated December 4th, 2016
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What to know about bankruptcy and Part 9 Debt Agreements

Are you bankrupt or under a debt agreement? Understanding the differences, and similarities, are important.

  • How long it lasts. Bankruptcies last for a minimum of three years and a maximum of eight. You are only under a debt agreement until you repay your debts.
  • Your credit file. Bankruptcies will show on your credit file two years after the date you were discharged or five years from the date you became bankrupt, whenever is later. A debt agreement appears on your file for five years from the start date.
  • Your name on the National Personal Insolvency Index. If you're bankrupt your name will be listed forever, those on debt agreements are only listed for a limited amount of time.
  • Eligibility. Bankruptcy has no income, asset or debt thresholds but debt agreements do. You can't be bankrupt if you were previously bankrupt, and you can't enter a debt agreement if you've been bankrupt or under a debt agreement in the past 10 years.
  • Employment and income restrictions. Those under debt agreements have no restrictions, but bankrupt people have their income restricted and certain industries may have restrictions regarding employment.
  • Other restrictions. If you're bankrupt you have many restrictions, such as not being able to travel overseas without consent, and those under debt agreements usually need to disclose it if you own a business in another name.

Understanding bankruptcy: The questions we’ve been asked

Here at finder.com.au we get questions from readers all the time about bankruptcy. We’ve brought together some of the most common questions to help shed some light on a complicated financial process.

How long does bankruptcy last?

You are usually considered bankrupt for three years, but this can be extended to five or eight years if your trustee lodges an objection to your discharge.

When will my bankruptcy end?

Bankruptcy is considered ended as the result of an annulment or you being discharged.

  • Discharged. If you became bankrupt by presenting your own petition, you will be due for discharge three years and one day after you filed that petition and your statement of affairs. If you became bankrupt by a sequestration order of the court, you will be due for discharge three years and one day after your statement of affairs was accepted.
  • Annulment. This is the cancellation of your bankruptcy and can happen when your debts are paid in full, your creditors accept a composition or agreement, or you successfully appeal to the court for an annulment.

How long does my bankruptcy remain on my credit file?

Your bankruptcy is listed on credit reporting agencies records for two years from the date you are discharged or five years from the date you became bankrupt, whichever is later.

After the listing is removed from my file will lenders be able to see I’ve been bankrupt?

Following the end of your bankruptcy, your name will remain forever on the National Personal Insolvency Index (NPII) as a discharged bankrupt. This information is publically available and any person can pay a fee to conduct a search of the NPII – this includes creditors, journalists and potential reporters.

Can I apply for a no credit check loan without telling the creditor I’m bankrupt?

There is a legal requirement for you to disclose your bankruptcy when applying for a loan over a certain amount. Currently, the threshold is $5,447.

Can I apply for a personal loan to take a holiday?

While you’re able to apply for a loan, overseas travel is restricted if you’re still currently bankrupt. You need to apply for permission to travel overseas with your trustee if you are currently bankrupt.

Elizabeth Barry

Elizabeth is a senior writer for finder.com.au specialising in personal finance. She enjoys reading PDSs so you don’t have to.

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36 Responses to Loans for bankrupts

  1. Default Gravatar
    stephen | September 19, 2016

    Im a pensioner on disability,im hoping to find someone who will help me pay my debts off.Im also bankrupt till march next year.My debts come to $1600.I just want to clear my name.Is there anyone who can help.I have tried for so long,to get a loan,but i keep getting knocked back.Can you help.

    • Staff
      Elizabeth | September 19, 2016

      Hi Stephen,

      I can’t give you any personal advice but there are a number of restrictions when it comes to lending money to currently bankrupt individuals. As your bankruptcy is intended to repay your debts, you’ll have trouble being approved for a debt consolidation loan while currently under bankruptcy.

      You may want to call the free financial counselling service who will be able to advise you of some suitable options. You can call them on 1800 007 007.

      I hope this helps,

      Elizabeth

  2. Default Gravatar
    Michelle | July 28, 2016

    What kinds of % do you offer in a round about way

    • Staff
      Elizabeth | July 29, 2016

      Hi Michelle,

      As a financial comparison service we don’t offer the loans ourselves, but you can compare your options on the page above. The lenders offer a range of loans that come at different costs depending on how much you borrow and for how long. You can click through to the individual review pages (by clicking on the name of the lender) to find out more about the cost structure and if it’s the right option for you.

      I hope this helps,

      Elizabeth

  3. Default Gravatar
    Michelle | July 28, 2016

    I am like to get a cash loan for$5800.00 for a car. Do you go that high

    • Staff
      Elizabeth | July 28, 2016

      Hi Michelle,

      As a financial comparison service we don’t offer the loans ourselves. However, you can find a list of lenders that consider bankrupt applicants on the page above. The two lenders that specifically offer car loans on the page above are Rapid Finance and Yes Loans, however, other lenders may offer personal loans for the loan amount you’re looking for. You can click through to any of the lender’s pages by selecting their name to find out more information about them.

      I hope this has helped,

      Elizabeth

    • Default Gravatar
      Michelle | July 29, 2016

      I live in Ontario Canada

    • Staff
      Elizabeth | July 29, 2016

      Hi Michelle,

      Unfortunately these lenders will only consider you if you’re currently residing in Australia. You’ll need to contact a lender in Canada if you’re looking for a loan.

      Sorry I couldn’t be of more assistance,

      Elizabeth

  4. Default Gravatar
    | July 22, 2016

    I would like to consolidate and home improve extensively due to a parent disability. Need a really large sum. Anyone willing to help a bankrupt person.

    • Staff
      Elizabeth | July 22, 2016

      Hi M,

      The lenders on this page consider those who are current and discharged bankrupts. I can’t recommend a specific lender but you can compare your options using the table above and find a loan you’re eligible for. To find out more about any of the lenders you can click through to their pages, and once you find one you’re eligible for and want to apply for you can click “Go to Site” to submit your application.

      I hope this helps,

      Elizabeth

  5. Default Gravatar
    Kate | July 12, 2016

    Hi, im applying for bankruptcy later this year and am researching my options for a home loan post banktuptcy. Is there any websites / forums you can recomend/ direct me to which may help me gather more information?

    Many thanks,
    Kate

    • Staff
      May | July 13, 2016

      Hi Kate,

      Thanks for your question.

      Unfortunately, if you’re in bankruptcy, you may have difficulty in accessing a loan, particularly a home loan, as bankruptcy will stay on your file for 7 years. You may need to wait to be discharged first from bankruptcy before you can apply for a home loan.

      In the meantime, on this page, you can find information on our guide and a list of specialist lenders that are willing to offer home loans to borrowers who have been discharged from bankruptcy for as early as one day.

      Cheers,
      May

  6. Default Gravatar
    Sandy | June 21, 2016

    Hi Elizabeth,
    My Part 9 Debt Agreement has been discharged for over 12 months. I’d like to get a loan for a vehicle. I have a deposit of $4000 and would require a loan of between $6K-$8K.
    Now apparently one of the creditors (bank) didn’t sign the debt agreement and onsold the debt, so even though I saw the amount outstanding going down on my credit card account, there was $341 remaining. When I asked the debt mediator why there was something left, even after I had finished paying, they told me about what the bank had done. I have not been notified by any other debt agency that I owe them money, so I don’t know if I apply for credit that that will go against me?
    I’ve requested my credit report from VEDA and am waiting for it to arrive to see if there are any answers on that.
    I’m not sure where to go from here?
    Cheers,

    • Staff
      Elizabeth | June 22, 2016

      Hi Sandy,

      You can get in contact with the Australian Financial Security Authority that handles debt agreements, bankruptcies etc. and discuss your situation and how it was handled – if you were under the impression that all of your debts were closed as part of the agreement then you may be able to submit a complaint.

      You can also contact the bank or the debt agreement agency to find out how much is owing on the debt and if you can pay it. Ordering a copy of your credit file is a great step as it might show where the debt is listed. Getting this debt cleared before you apply for your car loan is an important step to take to help your application, otherwise a negative listing is likely to still be listed on your file.

      I hope this information has helped.

      Thanks,

      Elizabeth

  7. Default Gravatar
    Mark | June 20, 2016

    i have just come out of bankrupcy and am trying to get a loan for a new vehicle $15000 to help with a new credit rating.
    I have paid off a new car leased over 5 years and 3 of them were in bankrupcy.
    But know one will look at me.
    During this time i have got another trade and now work 4 days a week in building earning $55 and hour and then i work as a skipper 1 to 3 days a weekend making $40 an hour
    I am finally starting to make money but know one will look at me
    Can anyone help

    • Staff
      Elizabeth | June 21, 2016

      Hi Mark,

      Unfortunately I can’t recommend a specific lender to you, but I can provide you some general information based on the options outlined above. The only lenders in the above table that specifically offer car loans are Rapid Finance and Yes Loans, so you may want to discuss your eligibility with them, and Needy Money offers personal loans up to $20,000 (and accepts applications from discharged bankrupts).

      If you have recently applied and been rejected for a loan you may want to hold off until you apply again to boost your chance of being approved. And as mentioned, discussing your eligibility before submitting your application is also a good option to consider.

      I hope this helps,

      Elizabeth

  8. Default Gravatar
    wondering | June 14, 2016

    I am wondering if i can get a centrelink loan after i have been discharged from Bankruptcy.

    • Staff
      Elizabeth | June 15, 2016

      Hi,

      Many of the lenders on the page above will consider you for a loan as a discharged bankrupt and if your income is from Centrelink payments – you can click through to read the eligibility criteria for each of the lenders by clicking on the names above.

      Hope this has helped,

      Elizabeth

  9. Default Gravatar
    Leeanne | June 4, 2016

    Hi I am out of bankruptcy mid August this year is it possible to get a loan for a car now??? If so who with please?? Thanks

    • Staff
      Elizabeth | June 6, 2016

      Hi Leeanne,

      You can consider some of the lenders listed above if you want to apply for a car loan. One lender that specialises in car loans in Rapid Finance. If you are willing to consider a personal loan you can take a look at some of the other lenders and what they are offering.

      Hope this helps,

      Elizabeth

  10. Default Gravatar
    Hi | June 4, 2016

    I have to replace the entire hvac system. The a/c is dead. I have a quote of $5600.00 to replace the system. Is it possible to get a loan for this amount if you are in bankruptcy?

    • Staff
      Elizabeth | June 6, 2016

      Hi,

      Certain lenders on the page above offer loans up to $5,000 and may consider you (check the criteria above to be sure it matches your situation). These lenders include Fair Go Finance and Wallet Wizard.

      Hope this helps,

      Elizabeth

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