Private lenders
Private lenders for bad credit: how property-secured loans work
Private lenders for bad credit look mainly at the property you offer as security and how you will repay, not just your credit file. A past default does not always rule you out, but it usually means higher cost and closer questions about the exit. Most of these loans are for business or investment purposes.
Written by Richard Goodwin, Founder and author, PrivetReviewed by Privet Team, Editorial review team, PrivetLast reviewed 23 October 2026
Getting a loan when banks say no
Banks follow strict policy rules, so a default, a past late payment or irregular income can stop an application. A loan when banks say no usually comes from a non-bank or private lender that uses an asset-based assessment: it asks how much equity is in the property and whether the exit is realistic.
That flexibility costs money. Expect higher interest, fees and a short term. Compare the numbers with the second mortgage calculator.
Do these lenders run a credit check?
Most do run a credit check, even when they do not decide on it alone. Be wary of anyone promising no checks at all: responsible lenders verify identity, and anti-money laundering rules require it. Read the scams and red flags guide.
What lenders look at instead
- Equity: the property value against all loans secured on it.
- Exit: a sale contract, a refinance path or another source of repayment.
- Purpose: business or investment use, which changes the rules that apply.
- Explanation: a short honest account of what caused the credit issue and what has changed.
The risks to weigh
If the loan is not repaid, the lender can enforce its security and sell the property. Default interest and fees can grow quickly. Plan a backup exit, read default and enforcement, and get independent legal advice before signing.
Frequently asked questions
Can I get a private loan with a default on my file?
Sometimes. Lenders that use an asset-based assessment may still lend if there is enough equity and a credible exit. Expect higher costs, and be honest about the default up front.
Are unsecured private loans available for bad credit?
Unsecured lending is rare in private property finance and is usually costly. Most private lenders want property security. Treat offers of large unsecured loans with no checks as a warning sign.
Related guides
- Low-doc property loans
- Second mortgage loans in Australia
- Caveat loans in Australia
- Scams and red flags
Glossary: combined lvr, valuation
Run the numbers
Test cost and timing with the matching calculator before you speak to anyone. Then send one enquiry to finance providers.
Cite or share this guide
Privet (2026). Private lenders for bad credit: how property-secured loans work. Retrieved from https://privet.com.au/private-lenders-bad-credit
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