Bad Credit Loans

Bad credit is much worse than it sounds. Most of the people suffering through this “Bad credit Tag” have only unknowing offense such as unpaid bills which they haven’t received due to

Change in Address
Gone overseas
Housemates ignored the letters
or something not paying unwillingly

Now, these default’s are on your credit file. This credit file is a record of your credit history maintained by credit reporting agencies like Equifax( Veda)
These defaults are also known as black marks and banks hesitate to give you a loan. Some other reasons banks won’t give you a loan apart from bad credit are:

Mortgage arrears: The number of missed payments on your home loan have a bad impact. Banks need at least the last six months of a good history of repayments of the loan.
Bad credit history: Unpaid defaults, bankruptcy, judgments, court matters and too many credit inquiries on your Equifax credit file is NO to your loan application for certain lenders
Lender credit history: Your past credit history with the same lender you are applying loan for can make a huge impact. Lenders often keep the long-term records of their customers.
Unpaid bills: Outstanding bills such as council rates or government-related bills are a type of bad credit history. These bills do not show on credit file unless they go through a debt collection agency but may be visible to the lenders.
Unpaid Tax: Lenders often take offense if we do not tell them if we have an unpaid amount to the tax department.
Company in financial trouble: If you own a company that is going through financial trouble, receivership or liquidation, then lenders will have access to this information and can make a bad on your credit check.

Loans with bad credit

Major banks and lenders will not even accept an application with a bad credit score.
There are few lenders who legally know much about credit scores and do want to dig more.

Why lenders ignore bad credit loans?

It can make people ability and mental health much worse if lenders still give loans to people who have trouble dealing with it psychologically.

The Household Expenditure Survey from the Australian Bureau of Statistics (ABS) published some common financial stress examples such as:

Not able to organize in sudden the amount of $2000 in seven days
remaining in credit all the time
Avoiding to pay utility bills on time.
Ignoring to pay registration or insurance
Pawning or selling valuable stuff

Lenders do take credit scores seriously to avoid stress and unwanted liabilities.

Types of bad credit home loans

Paid and unpaid defaults home loan

Paid defaults: This means that you have paid the amount in full.
Unpaid defaults: It’s about the defaults that haven’t been paid.

As the default is common in both of the above cases but some lenders do consider paid default as another category compared to where the client did not pay at all.
Contact us for more information

Discharged bankruptcy loan

The borrower who was bankrupt had their credit impairment for a limited time. Once the time is over they will be identified as discharged now. There are lenders which can come up front and can offer you the loan the very next day
The term ‘discharged’ is a legal term that separates the bankrupt person from bankruptcy. The client is no longer bankrupt but some lenders can still have a condition to wait for a limited time even they have been discharged.

Part 9 debt agreement

What is part 9 bankruptcy?

When a client is not able to repay, then there is a debt agreement administrator prepares a debt agreement between a client and a lender. Once the amount is paid in full, the debt agreement is fulfilled and the client is discharged.
Part 9 remains on credit file for up to seven years.
We have lenders on our panel which can consider such mortgage applications. Contact us now

Debt consolidation home loan

Some clients have too many small debts and get harder to manage. Instead, lenders add all these debts on the top of home loans and make one repayment. The client also benefits as most of the previous loans have higher interest rates than the new home loan rate which will be paying now.
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Why do lenders deal with bad credit loan?

The bad credit home loans were introduced to provide a chance to buy their own property as it would not be possible for people to stay on rent all their lives. People have to pay rent to live and if there is not much difference in rent and mortgage, people are more likely to follow the loan structure seriously.
The interest rates are bit higher but the clients can change it after a few years. It can be still a worthwhile mortgage if the property sees a little increase in value. Apart, it costs to sell home and buy another so people normally stick with the lender.

At Echoice Finance, we inform the clients about the catch and higher interest rates provided by the lenders. We assess the situation and provide you a free report if its worth to buy now or wait for the right time. We can provide you the estimate for how many years clients have to wait before they can refinance with another lender.

Bad credit home loans eligibility

The following conditions on your credit file can decide your application outcome:

Small paid default: Small paid default is considered when an amount for less than $500 has been paid more than six months ago. In such cases, clients can borrow up to 80% of the property value. In some cases, LVR can be 90%
More than one paid default: If the paid default amount is less than $1,000 from banks and less than $500 from non-financial institutions (e.g. phone bills), then the client can borrow between 80 to 85%.
Moderate paid defaults: In this situation, the paid defaults are less than $3,000. Clients can be able to borrow up to 80% through a prime lender. The specialist lender can provide loans up to 90% of the property value. In case of a security guarantee from the parents, 100% can be borrowed as well.
Largely paid defaults: This category has paid defaults between $3,000 to $ 500,000. The lenders are very strict and in a strong case, they can lend up to 80% of the property value.
Unpaid defaults: Lenders will only accept the case if you pay the balance due and all defaults.
Judgments or court Writs: Only non-conforming lenders can allow you to borrow 80% in this situation
Part IX agreement: The client has to wait till the agreement is finished. Lenders.
Bankruptcy: Lenders will ask the client to wait till the legal time is over

Who are non-conforming lenders?

The lenders who offer loans without conforming to traditional lending criteria are considered as non-conforming lenders.

Non-conforming lenders are far more flexible than the major banks. These lenders specialise dealing with

Bad credit Clients
Unusual Income
Newly arrived migrants with no credit history
specialized security
Properties in restricted areas

These non-conforming lenders take higher risk and so they charge higher interest rates to cover themselves.

If your risk is higher, they will charge you higher risk accordingly. The more deposit the clients contributes, the lesser is the risk to the lender in such cases

and hence interest rates can be lower too,

Which non-conforming lenders we deal with?

At Echoice Finance, we have few non-conforming lenders at our panel such as:

Bluestone Mortgages
Liberty Financial
Pepper Money
Resimac
La Trobe Financial
Auswide
MKM Capital and
Mystate lending

Discuss your Scenario

Talk to us and we may advice you if it is the right time to approach a non-conforming lender or it can be a worthwhile waiting till the record

gets clean enough to approach for full doc loan. CONTACT US NOW

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Bad Credit Home Loans