Loans After Bankruptcy
Being discharged from bankruptcy is a fresh start - but getting credit can still feel impossible. Most banks automatically decline applications from former bankrupts. We work with specialist lenders who understand that bankruptcy doesn't define you.
Your past doesn't define your future. We specialise in second-chance lending.
Bankruptcy was a difficult chapter, but it's a chapter that's now closed. You've dealt with your debts, gone through the process, and been discharged. Now you're ready to rebuild - but banks keep saying no.
Here's what they won't tell you: specialist lenders exist specifically for people in your situation. They understand that bankruptcy often happens to good people facing extraordinary circumstances. A business failure, medical crisis, or relationship breakdown - these things happen.
At Your Lending Friend, we connect discharged bankrupts with lenders who are willing to give you a second chance. We've helped thousands of Australians get back on their feet after bankruptcy.
When Can You Apply for Credit?
Your options improve over time - here's what to expect
During bankruptcy
Very limited - trustee approval needed for any credit
0-12 months post-discharge
Limited options available, higher interest rates
12-24 months post-discharge
More lenders willing to consider, better rates possible
2+ years post-discharge
Approaching mainstream options, competitive rates available
Note: These are general guidelines. Your specific circumstances may allow for earlier approval with some lenders. The best way to know your options is to let us assess your situation.
What Lenders Look For After Bankruptcy
Specialist lenders assess your current situation, not just your past
Time Since Discharge
The longer since your discharge, the better. 12+ months is preferred by most specialist lenders.
Stable Employment
Consistent income and employment history shows you can manage repayments.
Clean Credit Since Discharge
No new defaults or missed payments since your bankruptcy ended.
Savings History
Evidence of saving ability demonstrates financial discipline.
Reasonable Loan Amount
Requesting an appropriate amount relative to your income helps approval chances.
Asset or Deposit
Having a deposit or trade-in can strengthen your application.
Types of Loans Available After Bankruptcy
Different loan types become available at different stages
Car Loans
12+ months post-dischargeFinance for new or used vehicles. Often the first loan type available after bankruptcy.
Personal Loans
18+ months post-dischargeUnsecured funds for various purposes. Typically requires longer post-discharge period.
Secured Loans
12+ months post-dischargeLoans secured against assets. May be available sooner with appropriate security.
Business Finance
Varies by lenderEquipment or vehicle finance for business purposes. Assessed on business performance.
Building Credit After Bankruptcy
Your discharge is the starting line for rebuilding. Here's how to get your credit moving in the right direction.
Get a secured credit card
Start with a small limit, pay it off in full each month to build positive history.
Pay all bills on time
Utilities, phone bills, rent - all contribute to your credit profile now.
Check your credit report
Ensure your bankruptcy discharge is correctly recorded and watch for errors.
Avoid multiple applications
Each credit enquiry stays on your file for 5 years. Be strategic.
Consider a bad credit loan
A small loan repaid consistently can help rebuild your credit faster.
The Refinance Strategy
One of the best ways to rebuild after bankruptcy:
- 1Get approved for a car loan with a specialist lender (higher rate)
- 2Make every payment on time for 12-24 months
- 3Build positive credit history with consistent repayments
- 4Refinance to a better rate once your credit improves
This approach gets you the finance you need now while actively rebuilding your credit for better options in the future.
Bankruptcy is a Fresh Start
The legal process exists to give people a way out when debts become overwhelming. You've done the hard work of going through that process. Now it's time to rebuild - and we're here to help you do it.
Your past doesn't define your future.
Loans After Bankruptcy FAQs
Common questions about getting finance after bankruptcy discharge
Bankruptcy is listed on your credit file for either 5 years from the date of discharge, or 7 years from the date you became bankrupt - whichever is longer. This is separate from the National Personal Insolvency Index (NPII) which is a permanent record.
It's extremely difficult. While bankrupt, you must disclose ...
It's extremely difficult. While bankrupt, you must disclose your status when applying for credit over $6,379 (2024 threshold) and need trustee approval. Most lenders won't consider applications from undischarged bankrupts. We recommend waiting until discharge.
Technically, you can apply immediately after discharge. Howe...
Technically, you can apply immediately after discharge. However, your options will be very limited and rates will be high. Waiting 12 months post-discharge significantly improves your options. After 2 years, you'll have access to many more lenders and better rates.
Not always, but having a deposit helps. Some specialist lend...
Not always, but having a deposit helps. Some specialist lenders offer no-deposit options for discharged bankrupts with stable income. However, a 10-20% deposit can improve your approval chances and get you a better interest rate.
Rates vary based on time since discharge, your current circu...
Rates vary based on time since discharge, your current circumstances, and loan type. Expect rates 5-15% higher than standard loans initially. As you rebuild credit and time passes, you can refinance to better rates - often within 12-24 months of consistent repayments.
If you can wait, your options will certainly improve. Howeve...
If you can wait, your options will certainly improve. However, if you need finance now (like a car to get to work), don't let waiting years stop you. Get a loan now, make consistent repayments, and refinance to a better rate as your credit improves.
Still have questions? Contact our friendly team