Can You Get a Land Loan With Bad Credit?

Buying a block of land is often harder to finance than buying a home, and a bad credit history adds another layer. Many lenders are more cautious with vacant land, and many are more cautious with defaults, judgements or past bankruptcy. When both apply, the number of lenders that may consider the loan can be small.

That does not always mean a land loan with bad credit is out of reach. Some specialist lenders accept certain credit issues and also accept vacant land as security, usually with a lower maximum loan-to-value ratio (LVR), a smaller maximum loan size and stricter conditions on the land.

This guide explains how lenders may look at land loans and impaired credit together, what credit issues they commonly ask about, and how lender wording differs.

It is general information only, based on lender policy wording we reviewed in October 2026.

Related research: Can You Get a Home Loan for Vacant Land in Australia?

Can you get a land loan with bad credit?

Sometimes. It depends on the type and age of the credit issue, the land, the deposit and the lender. In the wording we reviewed, many mainstream lenders do not accept unpaid defaults, judgements or bankruptcy, and some do not accept vacant land at all. Some specialist lenders accept a range of credit issues and still consider vacant land, often at a lower maximum LVR than for a home.

A larger deposit, a clear explanation of what went wrong and a period of good conduct since can all make a difference.

What counts as bad credit for a land loan?

Lenders do not use a single definition of bad credit. They usually look at the specific events on your credit report and application, such as:

• late or missed repayments in your repayment history
• defaults, paid or unpaid
• court judgements or writs
• mortgage arrears
• a past or current bankruptcy, debt agreement or personal insolvency agreement
• a low credit score, or many recent credit enquiries
• tax debt, including ATO defaults

Lenders also look at the reason behind the issue, how much was owed, whether it has been paid and how long ago it happened.

How long do credit issues stay on your credit report?

The Office of the Australian Information Commissioner (OAIC, checked 2 November 2026) sets out how long different information can stay on a consumer credit report:

A default can be listed when a payment of $150 or more is at least 60 days overdue and the required notices have been given. Paying a default does not remove it, but the listing can be updated to show it has been paid. Source: OAIC, What stays on a credit report.

Why are lenders stricter on vacant land?

Vacant land is generally seen as higher risk security than a home. There is no building to value, land prices can move more sharply, and a block may take longer to sell. Because of this, lenders often:

• set a lower maximum LVR for vacant land than for a home
• limit the land size, location or zoning they accept
• require the land to be registered and serviced
• set a maximum loan amount for land only
• require a full valuation
• decline vacant land as the only security

When impaired credit is added, the lender is weighing two risks at once, which is why options narrow.

What is a specialist lender?

Specialist lenders, often non-banks, offer products designed for borrowers who sit outside mainstream bank policy, such as people with defaults, past bankruptcy or non-standard income. Many sort applicants into tiers, such as near prime and specialist, with each tier accepting more serious credit issues than the last.

Pricing and fees are usually higher as the tier moves further from prime, and the maximum LVR is often lower. Some borrowers use a specialist loan for a period and later look at refinancing once their credit history improves, although that depends on future lender policy and their circumstances at the time.

Does it matter if the default is paid?

Often, yes. Many lenders treat paid defaults more favourably than unpaid ones, and some ignore small or older listings. The amount, the age of the listing and whether it relates to a utility, telco or a lender can all matter. Our paid default guide covers this in more detail.

Related research: Can You Get a Home Loan With a Paid Default in Australia?

How do lender policies differ on land loans with bad credit?

We reviewed policy summaries for 40 Australian lenders (a mix of banks and non-banks) from a third-party broker policy tool, as at October 2026. This is a research sample of 40 lenders, not the whole market.

Lender wording differs on both credit issues and vacant land. These examples show how some lenders approach each:

• RedZed’s Recharge Specialist product ignores listings under $3,000 and listings over 24 months old, paid or unpaid. For Recharge Specialist only (no construction available), RedZed accepts unimproved land up to 5 acres in category 1 or 2 locations, with no covenants or construction within 24 months of settlement, at a maximum LVR of 80% up to $1M or 70% up to $1.5M. Its other products are narrower: Reward Near Prime ignores listings under $2,000 and limits unimproved land to 1 acre in category 1 locations, and SE Prime XL lists vacant land as unacceptable security.
• Bluestone’s Specialist tier lists defaults registered more than 12 months ago, or total defaults under $3k. Its vacant land wording permits a maximum LVR of 70%, requires the land to be registered and entirely vacant, and sets a maximum loan amount of $1.5M.
• Resimac accepts applicants with defaults, writs or summons listed over 24 months ago, paid or unpaid. It says vacant land is acceptable as collateral security, but vacant land as sole security is unacceptable.
• Wave Money accepts vacant land as collateral security for its Peak Wave (Specialist) product only. Under its Peak Wave (Specialist) credit wording, defaults over $500 and up to $1,000 over the last five years are accepted, but defaults over $1,000 are not.
• La Trobe Financial says credit impairment is considered on all products, assessed on a life event basis, and that vacant land is eligible under its Lite Doc product.
• Thinktank lists paid or unpaid defaults that are not in dispute and exceed $1000 in total as not acceptable. Its residential policy accepts vacant land with a maximum land size of 10 acres.
• ING lists unpaid defaults and any court action, writ, summons or judgement as unacceptable credit report findings, and says vacant land security is unacceptable.

These are examples of how differently lenders approach the same situation. These examples are not recommendations, and policy must be confirmed before an application is lodged. Policies change often, so confirm the current position with a broker before you apply.

Policy summary as at October 2026, from a third-party broker policy tool (export dated 20 October 2026). The lender guides behind it are dated between February 2026 and October 2026 for the lenders named on this page. The sample counts on this page cover all 40 lenders, whose guides are dated between October 2025 and October 2026. For example, RedZed's guide is dated February 2026. Lender policies change often and may have changed since.

What if you have been bankrupt?

A past bankruptcy is one of the harder credit issues for a land loan. Many lenders do not accept it at all, and some specialist lenders consider it once it has been discharged for a set period. Bluestone’s wording, for example, lists discharged bankruptcy as not accepted on Prime and accepted after more than 2 years on Near Prime.

Related research: Can You Get a Home Loan After Bankruptcy in Australia?

What about late repayments without a default?

Late repayments can show in your repayment history for 2 years even if no default was listed. Lenders may look at how recent and how frequent they are, and at your bank statements for missed or dishonoured payments.

Related research: Can You Get a Home Loan With Late Repayments but No Default?

Can you use land equity later to build?

If you buy land now and plan to build later, the land loan and the construction loan may be assessed at different times. A lender that accepts your credit for a land loan will not always offer construction lending, and the reverse is also true. Some specialist land policies also restrict building within a set period after settlement, as in the RedZed wording above, so the timing of any build can affect which policy fits.

What documents may lenders ask for?

• a written explanation of each credit issue and what has changed since
• evidence that defaults or judgements have been paid
• bankruptcy discharge or debt agreement completion documents
• recent bank statements showing current conduct
• income documents, such as payslips, tax returns or BAS
• the land contract, title details and zoning information
• evidence of your deposit and where it came from

10 common mistakes with land loans and bad credit

1. Applying with several lenders at once and adding many credit enquiries.
2. Assuming a lender that accepts the credit issue also accepts vacant land.
3. Assuming a paid default disappears from the credit report.
4. Not checking the credit report before applying.
5. Leaving out a credit issue on the application.
6. Signing an unconditional land contract before finance is checked.
7. Expecting the same LVR as a home loan.
8. Overlooking land size, zoning or service limits.
9. Ignoring time-to-build covenants on the land.
10. Missing repayments on other debts while the application is in progress.

How to improve your chances before applying

• Get a copy of your credit report from each major credit reporting body.
• Correct any errors through the credit reporting body or the credit provider.
• Pay or settle any outstanding defaults or judgements where possible.
• Build a record of on-time repayments and clean bank statements.
• Save a larger deposit, as land loans often have lower LVRs.
• Check the land’s zoning, size, registration and services.
• Make the land contract subject to finance.

Is it worth waiting before applying?

It can be. Some lender policies treat credit issues differently once they are older than 12 or 24 months, and repayment history information drops off after 2 years. Waiting can also give time to save a larger deposit. On the other hand, land prices can move, and some specialist lenders may consider an application sooner. The trade-off depends on the credit issue and the land.

Example scenarios

Scenario 1: Small paid telco default

A buyer has a $700 telco default, paid 18 months ago, and wants a land loan with a 25% deposit. Some lenders ignore small paid listings, so a number of options may still be available, depending on the land.

Scenario 2: Recent unpaid defaults

A buyer has two unpaid defaults of about $2,500 each from last year and a 20% deposit for a block. Many mainstream lenders would not consider it. Some specialist lenders may, possibly at a lower LVR, and paying the defaults first could widen options.

Scenario 3: Discharged bankruptcy

A buyer was discharged from bankruptcy 3 years ago and has clean conduct since. Some specialist lenders consider discharged bankruptcy after a set period. The land would also need to fit the lender’s vacant land rules.

Scenario 4: Rural block and credit issues

A buyer with recent defaults wants a 20-acre vacant rural block. Several specialist land policies limit land size to between 1 and 10 acres, so this combination is likely to be very hard to finance. A smaller block, or land with a home, may give more options.

So, can you get a land loan with bad credit?

Sometimes. Land loans are already stricter than home loans, and impaired credit narrows the options further. Some specialist lenders consider both, usually with lower LVRs, loan size limits and conditions on the land.

The type, size and age of the credit issue, and how the land fits each lender’s rules, tend to decide which options are realistic.

Need help with a land loan and bad credit?

A Fundd mortgage broker can help you compare options and check whether current lender policies may suit your land purchase and credit history. We can review your credit report, land contract and income details with you before you apply.