Summary: Can I get approved for refinancing if I have bad credit?

Details Description
Customer David and Jenna Thompson
Mortgage broker Prakash Rai
Purpose Refinance home loan, Debt consolidation, Novated lease consolidation
Loan amount $661,290
Security $1,400,000
LVR (Term) 47.23% LVR (30 Years)
Income $118,560 p/a (David) and $52,044 p/a (Jenna)

The Backstory

David and Jenna were a hardworking married couple with four amazing children – aged 15, 12, 10 and 8. They had stable employment and a good income. They were responsible with their finances and had built up good equity over the years, and they had an LVR lower than 50%. The COVID-19 pandemic hit them hard, however, and they struggled to stay on track with their finances. As with many families, unexpected expenses, reduced working hours and other financial challenges had caused them to fall behind on their credit-card payments. In 2016, David and Jenna were approved for a loan with a standard variable interest rate of 6.04%. However, their interest rate increased by 3 percentage points, reaching 9.04%. They found the rate quite high and wanted to refinance to another lender with a lower interest rate. They also looked to consolidate their credit-card debts and their novated lease.


David and Jenna contacted Prakash Rai, a mortgage broker from Home Loan Experts. Prakash identified the best lender and loan product for them. While they had no defaults, there were in arrears on some of their accounts, which made it more challenging to find the right loan product for them. Other challenges popped up as well. The new lender requested updated documents at every stage of the approval process, even after the conditional approval was issued, they requested previously sent documents. This became an issue because the couple was unwilling to co-operate. They hesitated to send updated documents because they feared that new arrears might affect the loan product they had been offered. The approval process was slowed down as a result. Another problem that arose during their application process was an increase in the clients’ living expenses. This could potentially affect their borrowing capacity and loan approval. Throughout the process, there was much communication and back-and-forth between the clients, the broker and the lender. The consolidation of the clients’ novated lease presented a challenge as Not all lenders provide that option.


Prakash and his team were a constant source of reassurance for David and Jenna throughout the loan process. They provided support and guidance with every step of the way, assuring the couple that they had nothing to worry about. Prakash told them that he was sure that he could help them secure approval for the loan if they co-operated and provided the updated documents. This convinced the couple to provide updated documentation promptly. Prakash also advised the clients to pay their debts that were in arrears. After doing so, the couple could use the new documents as evidence to get a lower interest rate. This move proved to be instrumental in establishing the couple’s financial stability, increasing their chances of securing the best possible rate. To further improve their chances, Prakash worked closely with David and Jenna to address concerns about their increased living expenses. He told the couple to provide a detailed explanation and address any questions from the lender. This helped address the lender’s concerns and secure approval. Initially, due to the clients’ bad debt, Prakash recommended a specialist lender while refinancing. However, he made it clear that once their debts were consolidated, if they remained in good financial standing, they could refinance with a major lender in the future.

A Happy Ending

With Prakash and his team on their side, David and Jenna were able to achieve their financial goals, including refinancing their home loan, and consolidating their credit-card debts and novated lease. Their new standard variable interest rate was 6.44%. Since the loan was refinanced to a non-conforming lender, they didn’t receive any package benefits; however, they saved a substantial amount on their repayments and they should be able to refinance at a better rate, with benefits, in a few years. The couple was thrilled with the result and grateful for the support and guidance our Home Loan Experts broker provided. With their financial future on track, they could now focus on the things that truly matter in life.

We Can Help You Refinance!

Don’t let bad credit or financial arrears hold you back from refinancing. Our team of experts is here to help you get approved for the loan you need. We specialise in finding solutions for people in even the toughest financial situations. With over 50 lenders on our panel, we have a wide range of options to choose from to meet your unique needs. Call us on 1300 889 743 or fill in our free online assessment form.