Travel Loans for Bad Credit Enable Critical Interstate Family Visits Post-Bankruptcy

Amid rising living costs and persistent credit challenges, Australians are increasingly turning to domestic travel to maintain essential family ties. A new trend, driven by necessity as much as choice, is highlighting the role of niche lending products, specifically, travel loans for bad credit, in enabling interstate journeys during times of personal crisis.

According to NRMA's 2025 Travel Index, 38 per cent of Australians now prefer domestic travel over international holidays. This surge is largely attributed to financial constraints, with nearly half of respondents citing elevated living expenses as their main consideration. With affordability in mind, more families are choosing practical trips to reconnect with loved ones rather than discretionary overseas getaways.

Domestic Travel Surge Meets Bad Credit Lending Gap

The financial services sector is responding to the shift. As personal loan volumes continue to hover around $2.5 billion monthly across Australia, more providers are introducing targeted offerings for borrowers with less-than-perfect credit histories. Many of these loans fall within the $2,000 to $20,000 range, aligning with typical domestic travel expenses such as flights, car hire, accommodation, and emergency bookings.

Unlike standard personal loans, travel loans for bad credit are designed with alternative eligibility criteria. While credit score remains relevant, a growing number of lenders now evaluate income stability, current debt obligations, and repayment capability instead of past financial defaults alone.

Interest rates for travel loans vary considerably:

Credit Score Bracket

Average Interest Rate

Loan Range

Excellent (800+)

9.79% p.a.

$5,000 – $50,000

Good (661–799)

13.87% p.a.

$3,000 – $40,000

Poor (0–459)

25.25% p.a.

$2,000 – $20,000

For borrowers with poor credit, that differential can translate into over $1,600 in added interest on a $10,000 loan over a three-year period.

Bankruptcy Isn’t the End of Borrowing

Bankruptcy remains a key barrier in Australia’s lending landscape. Yet the law permits discharged bankruptcies to apply for credit without restriction. Financial experts generally advise a 12–24 month waiting period post-discharge to allow borrowers to demonstrate stability.

Data from ASIC and major credit reporting agencies shows that discharged bankruptcies typically experience limited access to mainstream financial products for at least 12 months after discharge.

However, lenders specialising in travel loans for bad credit increasingly consider alternative criteria, such as consistent employment, evidence of budgeting, and stable housing over legacy defaults. This shift reflects a broader move toward inclusive lending practices, particularly for those who have demonstrated a clear improvement in financial behaviour.

In Australia, over 9,000 individuals were discharged from bankruptcy in 2024, and many remain ineligible for standard credit due to rigid score-based assessments.

Lenders in the non-bank sector are filling this gap by offering modest travel loans with higher interest rates but faster approval processes, especially for domestic travel tied to compassionate or family obligations. These developments help restore mobility and access for individuals seeking to rebuild after major financial setbacks.

Legal Considerations for Active Bankrupts

Under current regulation, Australians still undergoing bankruptcy proceedings must obtain written permission from their trustee before leaving their state or the country.

While AFSA (Australian Financial Security Authority) guidelines permit travel for compassionate reasons, including medical emergencies and funerals, the process requires formal documentation, application fees, and advance notice.

• Submitting the official AFSA travel request form

• Providing a detailed itinerary and justification

• Demonstrating that travel does not conflict with bankruptcy obligations

Most trustees respond within 7–14 days, but timing can vary. Individuals are urged to seek legal or financial advice before planning.

Viable Alternatives When Loans Aren’t an Option

Not all borrowers qualify for unsecured travel loans, especially those with active bankruptcies or unstable income. In such cases, alternative resources are available:

1. No Interest Loan Scheme (NILS): This government-supported initiative offers loans up to $1,500 with no credit check or interest. While primarily aimed at essential goods, limited exceptions are made for urgent travel in medical or family circumstances.

2. Informal Family Lending: Some households are turning to family-based agreements or crowdfunding to cover emergency travel costs. While not a long-term solution, these arrangements can bridge short-term needs without affecting credit reports.

3. Travel Provider Layby Options: Airlines like Jetstar offer 'Book Now, Pay Later' options via Afterpay and Zip Pay. These services may provide enough flexibility for immediate bookings without a traditional loan structure.

Lender Responsibility and Risk Warnings

The National Consumer Credit Protection Act mandates that lenders conduct thorough suitability checks. This means any loan must meet the borrower’s needs and be affordable without leading to financial hardship.

In this context, borrowers should remain particularly cautious of lenders that offer guaranteed approvals regardless of personal circumstances, demand high upfront fees that exceed 20% of the total loan amount, or use pressure tactics to rush individuals into signing agreements.

These behaviours are widely recognised as red flags for predatory lending, which remains prevalent in the fringe lending space and disproportionately affects financially vulnerable Australians.

Credit Repair as a Long-Term Strategy

Many Australians view travel as a short-term necessity, but experts argue that rebuilding credit should remain a parallel goal. Effective credit rehabilitation strategies include:

• Consistently paying rent, utilities, and phone bills on time

• Responsibly using secured credit cards or micro-loans

• Regularly reviewing credit reports for accuracy

Credit reporting agencies such as Equifax and illion now track positive repayment behaviour, meaning good habits can improve credit scores within 18–24 months.

Where to Apply and Get Support

A number of providers cater to Australians seeking travel loans for bad credit, connecting applicants to lenders that consider broader financial circumstances, including income consistency and family needs.

The service streamlines access to personalised borrowing solutions and helps Australians compare offers from multiple providers.

Other lenders in this space include Money3, which offers loans up to $30,000, even for borrowers receiving Centrelink; Australian Lending Centre, which provides no credit check options and flexible underwriting for discharged bankrupts; and MoneyMe, which leverages automated approvals for travel loans ranging from $5,000 to $50,000.

Reconnecting Through Informed Borrowing

As domestic travel becomes both a financial necessity and an emotional lifeline, more Australians are turning to bad credit travel loans to fulfil critical family obligations. While not without risk, these products, when chosen wisely, can serve as practical tools for regaining financial control while maintaining key relationships.

In a climate where more people face bankruptcy and reduced borrowing power, ensuring access to safe, transparent, and responsible credit options is increasingly essential. Through strategic borrowing and ongoing credit repair, financially vulnerable Australians can participate in vital family moments, regardless of their credit history.