Learn how to secure personal loans with a low credit score. Compare options, improve your approval chances, and explore ways to improve your financial health.
Published on 27/01/2025
By Pallav Verma
Personal Loan Comparison
Borrowing money with a low credit score doesn’t have to feel impossible. Here’s how to find the right personal loan and improve your financial future.
If you’ve been told that a low credit score limits your borrowing options, don’t worry—you’re not alone, and you’re not completely out of luck. Many Australians face financial challenges that can impact their credit, but getting a personal loan with a low credit score is still possible if you know what to look for.
This guide will walk you through smart strategies for securing a personal loan, compare options, and offer actionable tips to increase your chances of approval—all while managing your finances responsibly.
By the end of this article, you’ll know how to compare personal loans, identify flexible lenders, and make confident decisions that support your financial goals.
Disclaimer: This blog is for informational purposes only and does not constitute financial advice. Always consider your personal circumstances and seek professional guidance before making financial decisions.
Your credit score is a key number that reflects your financial behavior. Most Australian credit scores range from 0 to 1200, with anything below 510 generally considered “below average” or “poor,” according to Equifax.
A low credit score signals to lenders that you may be a higher-risk borrower. This means it may:
The good news? Many lenders consider more than just your credit score when assessing applications. However, loan approvals depend on multiple factors, such as your income, expenses, and overall financial situation, and are not guaranteed. By taking the right approach, you may improve your chances of securing the financing you need.
Personal loans can be powerful financial tools—especially when used wisely. For borrowers with low credit scores, they can help to:
Just be mindful of the costs associated with loans for low credit borrowers—higher interest rates mean you should only borrow what’s truly necessary.
When searching for a personal loan, it pays to compare lenders carefully. Here’s how to find the best loan for your situation.
Before applying for a loan, get a clear picture of where you stand. You can access a free credit report every three months from agencies like Equifax, Experian, or Illion.
Knowing your score also helps you avoid applying to lenders with strict criteria that might lower your chances of approval.
Australia has plenty of lenders who cater to individuals with low credit scores, including online platforms, peer-to-peer lenders, and credit unions. Look for lenders who are committed to transparent terms and responsible practices.
It’s important to look beyond the advertised interest rate. Compare the comparison rate, which includes the interest rate plus fees like monthly charges or loan application costs.
You may come across two types of loans when searching for financing.
Most lenders provide free online tools to estimate your repayments. Check that the loan’s monthly repayment aligns with your budget before committing.
Here’s how to boost your chances of getting approved for a personal loan, even with a low credit score.
Start with lenders whose eligibility requirements suit your financial situation. Peer-to-peer lending platforms like Plenti, for instance, may offer more flexible terms.
Lenders love stability. Take small, actionable steps like showing a steady income, reducing existing debts, and ensuring that your personal information matches across all documents.
For example:
A co-signer with good credit can strengthen your loan application. They agree to take joint responsibility for repayments, which can increase your chances of approval or even secure a lower interest rate.
If possible, apply for smaller loan amounts first and repay them on time. This demonstrates good financial behavior and can improve your eligibility for larger loans in the future.
Building your credit score over time is the best long-term solution for improving your borrowing prospects. Here are some tips to get started today.
This includes everything from utility bills to mobile phone payments. Set up automatic reminders or direct debits to make sure you never miss a due date.
Each loan application impacts your credit score. Before applying, do your research to ensure you meet the lender’s eligibility criteria.
If you have outstanding debts, focus on paying them down. Consider making payments that exceed the minimum amount when possible.
Working with a responsible lender can make all the difference when borrowing with a low credit score. Here’s what to look for:
Navigating personal loans with a low credit score may seem challenging, but with the right approach, it’s entirely achievable. Remember to research your options, compare personal loans, and take steps to build better habits for long-term financial health.
Looking for a trustworthy lender? Explore FlashMoney, Plenti, or MoneyMe for competitive options tailored to low-credit borrowers.
Or start your research using loan comparison tools today. The sooner you take control, the closer you’ll be to achieving your financial goals.
Disclaimer: The content provided is for informational purposes only and is based on publicly available information. While efforts are made to ensure accuracy, readers should verify all details with personal loan providers or distributors. Econnex may earn a commission from selected providers when users switch plans via its platform. Not all plans or providers may be included in the comparison, and availability can vary. This blog does not constitute professional advice and should not be the sole basis for financial or energy decisions.
