What Are The Best Loans For People Who Have Bad Credit?

By Angela Monroe - May 31, 2019

Most people who have bad credit often find themselves in a situation where they need quick cash for an emergency situation but struggle to find a lender who is willing to loan them money. Their poor credit scores, whether a result of poor financial decisions in the past or plain bad luck, have sadly wreaked havoc on their borrowing power and financial goals.

While they can improve their credit scores, it can take months or years. Consequently, many resorts to bad credit loans. Also called second chance loans, these financings give little importance to borrowers’ credit scores in exchange for higher interest payments and large down payments.

The following are some of the best loans that people with bad credit can use for their immediate needs and for improving their credit ratings.

Bad Credit Car Loans

People with bad credit who need to buy a car for personal or business use can get subprime auto loans. Like all bad credit loans, lenders require larger down payments and higher interest rates. The loan terms usually range from one to seven years. The borrowers can choose between new or used vehicles. Often, the cars serve as collateral for the loan and the lenders repossess them if the borrowers cannot complete the repayment.

Bad Credit Caravan Loans

Bad credit caravan loans work just like subprime auto loans but instead of cars, the borrowers buy all kinds of caravans, including:

  • New and old conventional caravans
  • Twin axle caravan
  • Pop top caravans
  • Tiny GRP caravan
  • T@B caravan
  • Folding caravan
  • Tiny teardrop trailer
  • Fifth wheeler
  • trans-Atlantic caravan
  • On-road and off-road camper trailers
  • Motorhomes

Caravan loans are secured or unsecured. Borrowers can also secure caravan financing from a specialist lender.

Bad Credit Boat Loans

Designed especially for people who want to buy a boat for livelihood or recreation, most lending companies in Australia that offer bad credit boat loans accommodate borrowers with credit scores as low as 550.

Aside from fishing and commercial boats, most lenders that specialize in boat loan financing also cover other types of marine craft, such as:

  • Jet Ski
  • Sail Boat
  • Power Boat
  • House Boat
  • Dinghy
  • Yacht

Borrowers can borrow loan amounts that range from as little as $5,000 to a staggering $500,000 for yachts. The loan terms can range from one to 12 years while the interest rates can vary from low to high teens, depending on each borrower’s financial situation. Like other bad credit loans, the minimum down payment is 10% of the total purchase price.

Bad Credit Truck Loans 

Independent contractors who need a truck for business or commercial transporters who want to expand their fleet with new trucks get truck loans. These are personal loans meant for those to buy different types of cargo vehicles, including:

  • Delivery trucks
  • Dump Trucks
  • Prime Movers
  • Trailers
  • Transit Mixers
  • Tankers

They can be secured or unsecured. Most truck loans, however, are secured against the vehicle. Borrowers use the lender’s money to purchase the vehicles and then repay the full loan amount plus interest over an agreed period of time. The vehicles are repossessed if the borrowers default on the loan.

Bad Credit Motorbike Loans

Motorcycle loans are available from lenders or manufacturers that offer in-house financings, like Harley Davidson, Ducati and BMW. Motorcycles are generally considered recreational vehicles. Thus, motorbike loans are typically classified under recreational loans along with boat and caravan financing. The maximum term is usually around 6 years.

Motorcycles need accessories, like a helmet and protective clothing, which can be included in the loan. Hence, borrowers should include accessories in their consideration when selecting a financing option.

Bad Credit Equipment Loans

These loans help those who want to acquire business equipment even when short on cash and bad credit history. Business owners can grow their revenues with new tools and machinery. The ROI contributed by the new equipment also helps borrowers pay off the loan early. 

Bad Credit Home Loans

Generally, subprime mortgages have a much higher interest rate than conventional home loans. Some of these financings may be set up as adjustable rate mortgages where the initial promotional interest rate is lower than a fixed-rate mortgage, but the interest and monthly payments increase after the introductory term.

Some subprime mortgages also have negative amortization, which happens when the monthly payments cannot cover the interest due on the mortgage. Negative amortization makes it more difficult to pay down the loan balance.

Bad Credit Personal Loans

Borrowers with credit defaults, bankruptcy and other debt issues can secure bad credit personal financings. These loans cover personal expenses like emergency bills and temporary shortfalls in cash.

Bad Credit Debt Consolidation

A debt consolidation loan is a personal loan to pay off multiple debts. Borrowers with bad credit can get a debt consolidation loan with interest rates that can be as high as 30%. Lenders may pay the borrowers’ debt while the latter repay the lenders with interest. Alternatively, borrowers can use debt consolidation loan funds to pay out existing loans and close the accounts.


Loans For People With Bad Credit offers bad credit loans without much paperwork and hassle. Complete our Quick Application to get the car loan, home loan and other financings you need or call 1300 769 384.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.


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