Switchboard Finance | Business & Equipment Loans Australia

Default

A Default occurs when a borrower fails to make the required repayments for an extended period, usually 60+ days overdue. Defaults appear on your Credit File and heavily affect approval chances for Low Doc Loans, Vehicle Finance, Equipment Finance, and Business Loans. Related terms: Arrears, Late Payment, Repayment History. Relevant blogs: What Lenders Look For With Defaults, Bad Credit Business Loans 2025, Rebuilder Credit Roadmap 2025.

Why Defaults Matter

Defaults are one of the strongest negative indicators in credit assessment. A single default can prevent approval for months or years, especially for borrowers in the Tradie Hub, Truckie Hub, Café Hub, and Whitecoat Hub. Lenders heavily prioritise applicants with clean recent repayment history.

What Defaults Show

Repayments overdue for 60+ days.
Significant signs of financial stress.
Higher risk for Business Lines of Credit.
Increased scrutiny for Working Capital Loans and Invoice Finance.
Need to stabilise repayment behaviour before reapplying.

Official info: asic.gov.au

How long does a default stay on my credit file?

Defaults typically remain for 5 years, even after being paid.

Can I get finance if I have a default?

Yes — some lenders consider paid defaults, but approval is harder for Low Doc or unsecured loans.

Does paying a default remove it?

No — paying a default updates the status but does not remove it from your file.

What causes a default?

Missed repayments, ignored notices, or overdue bills outstanding for more than 60 days.

Can a default be removed?

Yes — if recorded incorrectly or if the creditor agrees to withdraw it in rare cases.