Second Chance Loans

Second Chance Personal Loans With Bad Credit

Alright, so you have a bad credit score, and you urgently need money loan for whatever reason, only to find out that lenders don’t trust you because of your bad credit history. But hey, don’t lose hope yet! You can still apply for a second chance loan and get the required funds transferred to your account in no time.

In this guide, we’ll give you a quick overview of what second chance money loans Australia are and walk you through the necessary steps needed to apply for one. 

What Are Second Chance Loans?

second chance personal loans with bad credit

A second chance bond loan eligibility is a special type of loan intended for individuals who can’t get a traditional loan because of their bad credit history. 

Generally speaking, there are two types of second chance personal loans: long-term and short-term. Long-term second chance loans are usually high in value ($5000 or more), and they’re repaid in instalments over the course of a long term-to-maturity period (1-10 years). 

On the flip side, short-term bad credit loans are intended for smaller amounts of money that don’t exceed $1000. These guarantor loans Australia have a much shorter term that often doesn’t exceed a month. In most cases, financial hardship loans are offered by payday lenders.

It’s also worth noting that the need a loan now must be paid back in full by the end of the term. Short term loans have higher interest rates than long term trustworthy unsecured loans because it’d be pointless for a lender to let you borrow such a small amount of money and make you pay low interests.

Based on our firsthand experience, lenders offer second chance loans because they believe that your not-so-impressive credit history doesn’t necessarily mean that you’re not responsible enough to borrow a loan and pay it back in full within the agreed time window. Now you can compare loans Australia and use Perfect Payday for a low interest loan.

last chance loans

If you’re able to provide enough proof that you have relevant income streams that can help you repay the loan, your bad credit score won’t be as significant.

Our investigation demonstrated that, many online lenders in Australia offer second chance loans and settlement loans no credit, and you can apply for them with a simple application form. However, bear in mind that not all online lenders can be trusted. It’s also preferable to apply for the loan through a direct lender instead of loan brokers or lead providers to get the funds transferred to your account quicker.

Before applying for a second chance 1000 loan from an online lender, or any other type of lending entity for that matter, make sure it’s registered with the Australian Securities and Investments Commission (ASIC) to avoid loan sharks and scammers. 

Usually, the lender will require some documents from you, like a bank statement and an HR letter. 

Second Chance Loans Requirements

second chance loans australia

Here are the general requirements needed to apply for a second chance loan in Australia:

  • To be 18 years old or older
  • To be an Australian citizen or a permanent resident of Australia 
  • To have a job with regular sources of income in the past 3 months

Depending on how bad your credit score is and your salary, some lenders may impose additional requirements.


A second chance loan isn’t the only option for someone with a bad credit history to borrow money. Here are some of the most common alternatives:

Apply for a Guarantor Loan

second chance personal loan with bad credit

Our findings show that, a guarantor loan is a type of loan where a guarantor co-signs the loan with the borrower. Having a guarantor with a better credit score to sign the loan with you provides enough security for the lender to trust you. Not to mention, a guarantor will help you get higher loan values with lower interests than if you apply for a second chance loan by yourself. 

The problem with this loan type is that the guarantor must be a first-degree relative, so if none of your family members agrees to be a guarantor or have better credit scores than yours, then you’re out of luck.

Consider Getting a Secured Loan

second chance personal loans

A secured loan is when the borrower provides their property as collateral to the lender. Secured loans for bad credit and low income allow you to borrow money with lower interest rates than unsecured loans. However, they’re quite risky, as you might lose your property if you default on the loan.

In Conclusion

A second chance loan isn’t the best type of loan out there, but your options are somewhat limited with a bad credit history. However, make sure that you seize the opportunity and fix your credit score rather than deteriorating it even further.

If you commit to make your payments on their set dates, you’ll improve your credit score dramatically. Hopefully, you’ll also become eligible to apply for better loan deals with lower interest rates and less strict requirements in the future.

About the Author

Lucy has over a decade of experience in finance. She is currently the content curator here at Perfect Payday.

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