Bad Credit Car Loans from 7.99% p.a.

What Counts as Bad Credit in Australia?

In Australia, your credit history is recorded by three main bureaus: Equifax, Experian, and illion. Lenders use this data, along with your credit score, to assess risk. “Bad credit” is not a fixed definition — it exists on a spectrum, and different lenders draw the line in different places.

Generally, the following issues on your credit file are considered negative marks that mainstream lenders may decline you for:

• Defaults — bills or debts that went unpaid for 60+ days and were listed by the creditor. Defaults stay on your file for 5 years.
• Court judgments — a court-ordered debt from a legal action. These remain for 5 years.
• Part IX debt agreements — a formal arrangement to repay creditors. Listed for 5 years from the start date or 2 years from completion.
• Bankruptcy — remains on your file for either 5 years from the date of bankruptcy or 2 years from discharge, whichever is later.
• Multiple credit enquiries — several applications in a short period suggest financial stress and reduce your score.
• Missed repayments — under comprehensive credit reporting, late payments on existing credit products are now recorded.

Credit scores in Australia typically range from 0 to 1,200 (Equifax). A score below 500 is generally considered “below average,” while 622-725 is “good” and above 833 is “excellent.” Specialist bad credit lenders on our panel work with scores as low as 300.

How Bad Credit Car Loans Work

Bad credit car loans are structured similarly to standard car loans, but they are offered by specialist lenders or the non-conforming divisions of major lenders. These lenders accept higher risk in exchange for charging a higher interest rate. The key differences compared to a standard car loan include:

• Higher interest rates — expect rates from 7.99% to 15.99% p.a., compared to 5.49% to 8.99% for prime borrowers
• Deposit requirements — some lenders require 10-20% deposit to reduce their exposure, though no-deposit options exist
• Vehicle restrictions — lenders may prefer newer vehicles (under 10 years old) as they hold value better as security
• Shorter loan terms — some lenders cap terms at 5 years for bad credit applicants
• Secured loans preferred — most bad credit loans are secured against the vehicle, reducing the lender's risk and your rate

The good news is that successfully managing a bad credit car loan is one of the best ways to rebuild your credit. Each on-time repayment is recorded under comprehensive credit reporting, gradually improving your score. After 12-24 months of clean repayment history, you may qualify to refinance into a lower-rate loan.

How We Help You Get Approved

Applying to the wrong lender with bad credit is costly — each declined application adds another hard enquiry to your file, further damaging your score. Our process is designed to protect your credit file while maximising your approval chances:

Eligibility and What You Need

While every lender has different criteria, the general requirements for a bad credit car loan in Australia are:

• Australian citizen, permanent resident, or eligible visa holder
• Aged 18 years or older
• Regular income from employment, self-employment, or Centrelink (some lenders)
• Ability to demonstrate current bills are being paid on time
• Valid Australian driver's licence
• Vehicle identified or general idea of purchase price and type

What Rates to Expect

Bad credit car loan rates are higher than standard rates because the lender is taking on more risk. Your actual rate depends on several factors, and understanding these can help you get the best possible deal:

Rates are indicative only and subject to lender assessment. Your actual rate may differ based on individual circumstances.