# 4 Ways to Get a Bad Credit Loan
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2021-12-27
Category: FINANCE
Category URL: https://financedigest.com/category/finance
Meta Title: Get a Loan on Bad Credit Despite Having a Mortgage
Meta Description: Struggling with bad credit, mortgage payments, and no income? Get a loan approval with Pocket Cash, a lender offering home equity loans and accepting
URL: https://financedigest.com/4-ways-to-get-a-bad-credit-loanhtml

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Tell us your financial woes…

- Low credit score?
- Already paying mortgage?
- No income source?
- Can’t find a lender to trust you?

What if we told you that we have the answer to all these questions?

Yes, you can get a [loan despite having bad credit](https://www.financedigest.com/credit-union-loans-in-high-demand.html "Credit Union Loans in High Demand") if you are already paying mortgage, have no income source, and can’t find a lender to trust you!

Let’s get right to the point, shall we?

## **Get a Loan on Bad Credit**

Despite your spotty credit history, a lender [like pocket cash](https://www.pocketcash.com.au/guaranteed-approval-of-loans-for-bad-credit-applications-on-centrelink/) will approve your bad credit loan application. In case you are wondering what your [credit score](https://www.financedigest.com/how-to-raise-my-credit-score-40-points-fast.html "How to raise my credit score 40 points fast") is, here are the ranges set by different credit bureaus:

**[Credit Score](https://www.financedigest.com/12-things-that-dont-hurt-your-credit-score.html "12 Things That Don’t Hurt Your Credit Score") Range****Equifax****illion****Experian****Excellent**833 – 1200800 – 1000800 – 1000**Very Good**726 – 832700 – 799700 – 799**Average**622 – 725625 – 699625 – 699**Fair**510 – 621550 – 624550 – 624**Poor**0 – 5090 – 5490 – 549

When you have a [bad credit score](https://www.financedigest.com/5-ways-to-grow-your-business-despite-a-bad-credit-score.html "5 Ways to Grow Your Business despite a Bad Credit Score"), a lender asks for the following things:

- Personal ID (Proof that you’re 18)
- Proof of income
- Proof that you are a resident of Australia

Your lender might make a soft inquiry to determine how low your [credit score](https://www.financedigest.com/1-in-5-uk-adults-have-no-idea-what-a-credit-score-is.html "1 in 5 UK adults have no idea what a credit score is") is. This information helps them decide how big of a loan they can give you and what the interest on it will be. The loan’s [interest rate](https://www.financedigest.com/interest-rate-and-recession-fears-knock-stocks-and-oil.html "Interest rate and recession fears knock stocks and oil") and origination fee are connected to the loan amount. For example, the APR on a $100 loan will be 4% and a $15 origination fee.

## **Get a Second Mortgage**

A home equity loan, also known as a second mortgage, is a [type of loan](https://www.financedigest.com/types-of-business-loans.html "Types of business loans") you take out against the equity you have built in your house. For example, if your house costs $300,000 and you have paid $100,000 in monthly payments, you can use this percentage of the house to [finance your loan](https://www.financedigest.com/1-in-3-uk-businesses-looking-for-finance-are-finding-it-harder-to-get-a-loan.html "1 in 3 UK businesses looking for finance are finding it harder to get a loan").

However, keep in mind that [since you are borrowing](https://www.financedigest.com/uk-credit-card-borrowing-rises-by-most-since-2005-boe.html "UK credit card borrowing rises by most since 2005 – BoE") against your house, it will be used as collateral. Meaning: If you default on the loan, your property will be seized. Nevertheless, this loan is a great [option](https://www.financedigest.com/do-you-have-bad-credit-consider-taking-out-these-loan-options.html "Do You Have Bad Credit? Consider Taking Out These Loan Options") for people who want a bigger loan. With the low interest rate, a [home equity loan](https://www.financedigest.com/home-equity-made-simple-things-to-know-before-applying-for-loans.html "Home Equity Made Simple – Things to Know Before Applying for Loans") allows you to use it for any purpose. Moreover, if you are spending it on home renovations, the amount will be tax-deductible.

## **No Income Loan**

Don’t have any traditional source of income?

No worries! You can still get a loan by showing your Centrelink payments. The following benefits are counted as income:

- Disability Support (NDIS) Pension
- Aged Pension
- Veterans’ Affairs Pension
- Parenting Payment
- Carer Payments
- Child Care Subsidy
- Job Seeker payments
- Family Tax Benefits A and B

Since your proof income is the only stable thing that is a requirement of all loans, it’s [important to show the lender that you receive a steady amount from any source](https://www.financedigest.com/indias-carmakers-back-zero-duty-on-limited-british-imports-under-trade-deal-sources.html "India’s carmakers back zero duty on limited British imports under trade deal – sources"). This can be your side gigs, your spouse’s [income and Centrelink payments](https://www.financedigest.com/action-is-needed-to-prevent-payments-disruption-from-incoming-eu-funds-transfer-regulation-says-new-deutsche-bank-whitepaper.html "Action is needed to prevent payments disruption from incoming EU Funds Transfer Regulation, says new Deutsche Bank whitepaper").

## **Finding a Trustworthy Lender**

Let’s say that you have a low [credit score](https://www.financedigest.com/benefits-of-a-good-credit-score.html "Benefits of a good credit score"). The lender asks for proof of income, and you show him your Centrelink payments. After looking at the information you have provided, he rejects your application saying that he doesn’t [think you can keep](https://www.financedigest.com/the-pull-of-the-past-1-in-5-keep-items-they-think-will-be-valuable-in-the-future.html "The pull of the past! 1 in 5 keep items they think will be valuable in the future") up with the weekly payments. After much negotiation, the lender still doesn’t agree and ask you to consult another lender.

However, you have done your research, and the online reviews said he is one of the best lenders in your area. You approach the lender again and ask if your application would be approved with a co-signer. The [lender asks for the co-signer’s information](https://www.financedigest.com/leading-credit-reference-agencies-launch-industry-wide-information-notice-to-support-lenders-and-consumers-in-gdpr-world.html "Leading credit reference agencies launch industry-wide information notice to support lenders and consumers in GDPR world"), and you present your friend’s documents. She has a good [credit score](https://www.financedigest.com/machine-learning-critical-for-better-sme-credit-scoring-in-trade-finance.html "Machine learning critical for better SME credit scoring in trade finance") and a stable job. She also earns three times more than you. The [lender agrees to give you the loan](https://www.financedigest.com/uk-lenders-trial-government-backed-loans-for-risky-borrowers.html "UK lenders trial government-backed loans for risky borrowers") if your friend takes responsibility for default payments.

This often happens when a lender looks at your [credit history and feels that you won’t be able to pay back the loan](https://www.financedigest.com/6-reasons-to-take-a-car-loan-from-a-credit-union.html "6 Reasons to Take a Car Loan From a Credit Union"). Since they take the bigger risk, they need to make sure that you are a liable candidate.

There are thousands of lenders available [online you can approach for a loan](https://www.financedigest.com/what-you-should-know-before-getting-a-loan-online.html "What You Should Know Before Getting a Loan Online"). Always consult multiple lenders before deciding on one. Some of the factors you should consider before finalising a lender include [interest rate](https://www.financedigest.com/ecb-firms-up-expectations-for-july-interest-rate-hike.html "ECB firms up expectations for July interest rate hike"), charging fee, and loan terms. Use an online calculator to determine how you can afford it so you can [manage your finances](https://www.financedigest.com/how-parents-can-help-students-manage-their-finances.html "How Parents Can Help Students Manage their Finances") accordingly and stay within your budget. If your application has all the right documents, you will probably receive your loan on the same day you apply for it.

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