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Bad Credit Loans

Bad Credit Unsecured & Secured Loans to £75,000+

If you have been refused loans by high street banks and other lenders you may believe that your financial situation is impossible. But don't panic - financial help is at hand. 

We specialise in helping people like yourself. Explore a wide range of bad credit loan options. Use our FREE broking service today. One or more loans could suit you. To learn about loan options use these Quick Links:

What's Your Credit Problem?

  • Declined elsewhere?
  • CCJs? Arrears? Defaults?
  • Bankruptcy/IVA?
  • Bad/adverse credit history?
  • No credit history?
  • Self employed? No accounts? No proof of income?
  • Part time employed?

 Look at the bad credit loan "map" below to help you compare & narrow down your options.

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Borrowing Options To Consider

There are a range of loans that can accommodate people with some form of impaired credit rating. There's no single "bad credit loan". Typically these loans have higher costs or need some form of security or guarantor. See below for a comparison of bad credit finance. Your specific borrowing options will depend on your personal circumstances and your credit status. If you don't know your credit rating you can find out by using a credit monitoring service.

Guarantor Loans (larger/longer term)

  • Borrow £500 to £15,000 unsecured
  • Repay over 1 to 5 years
  • Designed for people with poor credit
  • Instant in-principle lending decision
  • Multiple loan/lender options available
  • Guarantor can be a homeowner or a tenant
  • Payouts possible within 24 hours
  • Representative APR 39.9%

Car Finance

  • PCP & HP plans
  • Borrow from £1,000 to £50,000
  • 60+ products / 15+ lenders
  • Keep payments low by not owning vehicle
  • No deposit options available
  • Poor credit acceptable
  • Representative APR 19.1%

Instalment Loans

  • Borrow up to £2000
  • Repay in installments over 3 to 24 months
  • Fast payout is possible
  • Responsible lending policy
  • Only use this type of loan in exceptional circumstances
  • Representative APR 299%

Payday Loans

  • Borrow up to £1000
  • Trusted lenders only
  • Get payouts within 24 hours
  • Responsible lending policy
  • Only use this type of cash loan in exceptional circumstances
  • Only use for very short periods of time
  • Representative APR 1212%

Doorstep Loans

  • Small cash sums up to £2,500
  • Repay over 14 to 52 weeks
  • No bank account required
  • Pay weekly in fixed amounts
  • Friendly doorstep service
  • Multiple loan options
  • Representative APR 399.7%

Personal Loans (bad credit)

  • Unsecured Loans up to £12,500
  • Repay over 1 to 5 year period
  • Less than perfect credit acceptable
  • Tenant & Homeowners welcome
  • No guarantor required
  • Various lenders available
  • APR varies from 30% to 100% depending on credit score
  • Representative APR c.50%

Homeowner Loans

  • Secured loans up to £250,000
  • Repay over 5 to 25 years (i.e. long term)
  • You must own your home
  • Access your home's growing value
  • Less than perfect credit acceptable
  • Secured on the value of your property
  • From 5.8% APR (Typical 11.8% APR)

Guarantor Loans (smaller/shorter term)

  • Borrow £100 to £750
  • Repay in instalments over 6, 9, 12 or 24 months (i.e. short term)
  • Same day payouts are achievable
  • Less than perfect credit accepted
  • Lower cost & more flexible than a payday loan
  • Guarantor required but can be a non-homeowner
  • Representative APR 347% (12 months)

Logbook Loans

  • Borrow £500 to £25,000+
  • Typical Loan value £1000
  • Repay typically over 3 months to 2+ years
  • Loan secured on your car - so be careful
  • Poor credit acceptable (credit check done)
  • Trusted direct lenders
  • Representative APR 99.9%

Credit Card (rebuild credit)

  • Initial credit limit of £150 to £1000
  • Earn right to increased limit over time
  • Rebuild your credit status
  • Option to protect credit status
  • No Annual Fee
  • Consumer protection built in
  • Representative 39.9% APR (vrbl)

Bad Credit Loans Questions & Answers

What's meant by the term 'bad credit'?

Everything stems from your credit file. You don't have a credit file until you turn 18 and can start to apply for credit - things like credit cards, loans, mortgages, etc. So, everyone starts by having no credit history at all.

Having no credit history can itself be a problem as lenders can't judge how reliable a borrower you will be, but while this is a credit problem it is not a bad credit situation. In this case a credit card company might offer a credit card but with a low credit limit to begin with.

Over time you accumulate a credit history in your credit file. Lenders and providers of credit will record your credit behaviour with one or more of the UK's three main credit agencies (Experian, Equifax and Callcredit). The files will show whether you pay on time, whether you get into arrears or miss payments, and whether you default on debts completely. You might also get court judgements against you (so-called CCJs). So, there are degrees of "bad creditness". Some people's credit files contain more adverse events or adverse events of a more severe nature.

When you apply for credit or a loan the lender will use the data in your credit file to judge the risk of providing you with credit - in other words they will credit score you. If your score is not high enough they will refuse your application.

Be aware, as well, that the act of applying for credit will be recorded in your credit file (unless the lender does a "soft search"). If you make applications too frequently this fact will have a further adverse impact on your credit history.

What can I do to get rid of a bad credit history?

Improving your credit rating requires a combination of time and effort. You are not in control of what is already on your credit file (unless it is incorrect - here's how to check it), but you are in control of new information that is added to it.

What's already on your credit file

This depends on which records on your credit file are creating a "bad credit history". The following Information is kept on your file for:

  • Bankruptcy - 6 years from the date it began (even if now discharged) unless it lasts longer than this
  • IVA - 6 years from the date it began (even if now completed) unless it lasts longer than this
  • Administration order - 6 years from the date of the order evein if it is now paid in full
  • CCJs, etc - 6 years from the date of the judgement (but may be removed if paid in full within 1 month of the date of judgement)
  • Defaults - 6 years from the date of the default
  • Searches by lenders - 1-2 depending on credit agency (this excludes "soft searches" which are not recorded)

Live accounts will record your repayment behaviour while the account is open, and then once closed this information is stored for a further 6 years.

What is not yet on your credit file

So, "getting rid" of a bad credit history is partly dependent on time, but you can influence it by "diluting" bad news on your file with good news. You can start to rebuild your credit status by ensuring you make repayments for loans and credit cards on time and in full. There are certain products that can help you to do this - e.g. some credit cards and guarantor loans.

I've been refused credit. What can I do?

You have certain rights if you are refused credit by a company:

  • Lenders are obliged to tell you the main reasons for the refusal
  • If you were computer credit scored you can ask the lender to manually review the decision
  • If you were manually credit scored and you have additional information that you believe may help your case you can ask the lender to review their decision
  • The lender must tell you which credit reference agency they used to get the information about you - you can then check the information held by them to ensure it is accurate.

If the decision is reviewed by a lender then may still turn your application down. Since not all lenders use the same credit reference agencies and because they may/will use different scoring techniques while one lender may refuse your application another may accept it. But be cautious about applying too frequently as this may affect your credit file!

What is a bad credit loan?

The phrase "bad credit loan" is a catch-all term for various types of loans that can cater for credit history problems. Some loans, such as guarantor loans, have been specifically designed to help those who have credit problems. In some of the answers to questions above we've covered the reasons why you may have a bad credit rating.

These sorts of loans are likely to have higher interest rates attached to them simply because people with credit issues are judged as a higher risk (i.e. because of credit scoring methods used by lenders). Over time a person's credit rating can improve as they repay loans and bills in full and on time. This means that they will be able to get credit at better rates in the future.

Bad credit loans compensate for the extra risk in one or more of a number of ways:

  • they charge higher APR% than their good credit counterparts
  • they may require the loan to be secured on a valuable asset (e.g. house, car, jewellery, etc)
  • they may require someone to act as a guarantor to guarantee loan repayments if the borrower cannot
Are there alternative options for people with bad credit?

The options that you can consider are listed above. There is plenty of detail about these financial products accesible from the links above. As you can see there are a number of alternatives, but which are suitable for you depends very much on your personal circumstances.

Some people ask about "high approval bad credit loans" but the fact is that whether you are approved or not depends very much on:

  • your personal circumstances and credit history
  • whether the lender believes you can afford the loan repayments

Take a look around the website. If you need financial advice then you should use a qualified financial advisor.

Is a Guarantor Loan a good solution if I have bad credit?

Guarantor loans are one type of unsecured loan that could help you get finance when your credit history is less than perfect. Guarantor loans require you to provide someone to back you in your application and to stand behind your debt and repayments should you fail to do so.

They work on the principle that if you can find someone who trusts you to pay off the debt then your credit score (i.e. the measure of risk of lending to you based on your historic behaviour) is much less relevant.

In addition to getting you the credit you need they offer you the chance to improve/rebuild your credit rating. Each time you make a monthly repayment on time and in full this good news is added to your credit file so helping to dilute the bad news that is already on there.

Are bad credit loans safe?

As you can see from the comparison of loan options above there is no single type of product - just a number of alternatives that may suit people who have issues in their credit file. So, whether a loan is "safe" or not depends on the type of product in question.

So, what would be the worst case consequences of not keeping up your loan repayments:

  • Guarantor Loan (an unsecured loan) - your guarantor would be asked to step in and make the repayment; this would undoubtedly sour your relationship with your guarantor. Your credit file would be marked with the missed payments. A lender could ultimately go to Court to get an order agaionst you.
  • Personal Loan (an unsecured loan) - missed payments would be recorded on your credit file. If the lender were to issue a default notice this would also be recorded. The lender could go to Court to get a judgement (CCJs) and ultimately an order could be given to recover property to help repay the debt.
  • Secured Loans (e.g. homeowner loan and logbook loan) - when you take out this loan you place an asset (e.g. your house or car) as security. Ultimately the asset could be seized by the lender to pay off the loan.
  • Cash Loans (e.g. payday and doorstep loans) - these short term loans are "political dynamite" so lenders are very cautious about handling missed payments or delays in payment. There are very strict rules about how a lender can enforce the borrowing terms. Failure to repay will damage your credit rating.

In the case of any type of finance you should never borrow more than you can afford to repay. Lenders are required to conduct affordability tests prior to lending any money. But as a borrower you are obliged to repay on the terms agreed. If you fail to there are always going to be some consequences. At the very least your credit rating will be downgraded making borrowing harder in the future.

Why choose a bad credit loan?

Your credit history and your credit file is an aggregation of all your interactions with finance companies and other businesses who may extend you credit (e.g. utility companies and phone companies). If you have experienced money problems and this has led to you missing loan repayments or being late paying some bills then your credit file will be tarnished for a while.

If you were to need further credit in this situation then it may be more difficult to obtain. So, a lender who is more tolerant or a financing product that is more tolerant of a poor credit history is likely to be a solution. All the loans on this page are tolerant of a less than perfect credit history. The loans may be more expensive than you are used to but this will be the case while you are seen as a higher risk. However, if you pay off any new credit on time and in full your credit history will be improved and rates you pay in the future are likely to be lower.

How much can I borrow with a bad credit loan?

The amount you can borrow depends on:

  • The type of finance you want (see above)
  • How your income compares to your outgoings (the lender's affordability test)

For small sums of money (say £500, £1000, £2000) there are a number of alternative products worth considering:

  • Payday Loans
  • Doorstep Loans
  • Guarantor Loans
  • Bad Credit Personal Loans
  • Instalment Loans
  • Logbook Loans

As the sum you need increases (e.g. £3000, £4000, £5000 and upwards) the options change:

  • Guarantor Loans
  • Personal Loans - specialist bad credit lenders
  • Logbook Loans
  • Homeowner Loans
  • Car Finance

Regardless of the style of finance credit is always subject to affordability and a lender's judgement about risk. The latter could be assessed by a credit score. This will also affect the cost of the loan.

What are the advantages of a bad credit loan?

The key advantage is that just when you think you can't get credit you can - all the finance products above are built with credit issues in mind. You don't need perfect credit to get the credit you need.

Without these sorts of loan available people who have a bad credit history would never be able to get credit again and they would never be able to prove that they could manage their finances. The reality is that credit issues can hit anyone at any time due to a change of circumstances (e.g. moving house, changing job, becoming unemployed, etc).

What are the disadvantages of a bad credit loan?

The phrase "bad credit" is bandied about a lot. But at the heart of this phrase is the reality that someone has had a problem managing the credit they have previously been provided. It could be a few missed payments or something more serious like a default notice or a CCJ. For a new lender deciding whether to extend new credit they will see people with bad credit histories as more risky.

A lender could choose not to extend any more credit or they could choose to do so at an interest rate that is higher than normal to help offset the higher risk. It is this higher inteerest charge or APR that is perhaps the msjor disadvantage. But in addition a borrower could be requested to offer a guarantor or an asset as security.

What interest rate will I pay?

The comparison of bad credit loans above shows the representative APR% for each. So, do you consider these to be low interest loans? Perhaps not, but the interest rate charged by the lenders is adjusted to account for the extra risk they perceive. A person's credit file may show them to be unreliable when it comes to repayment so a lender has two choices:

  • don't lend at all
  • lend, but at a rate that takes account of risk

If you need credit then you should investigate which of these options suits your circumstances. Then narrow the options further based on the loan amount you want and the potential total cost of credit. Two rules for credit always apply:

  • Never borrow more than you really need
  • Always repay the loan as quickly as you can so that you minimise the total interest on the amount you borrow. So, make sure the lender will allow you to repay early without penalty.
Over what time period can I pay off the loan?

This all depends on which type of loan you look at. You can compare the loans above to judge what is right for you but in general you can cluster loans as follows:

Short Term (up to 12 months) - Payday loans, Doorstep loans

Medium Term (1 - 3 years) - Instalment loans, Guarantor loans, Personal loans, Logbook loans, Car Finance

Long Term (3+ years) - Personal loans, Homeowner loans

Can I use a bad credit loan to pay off other debts?

Technically you can use any loan to pay off other debts - but don't forget that this is simply replacing one form of debt with another. So, should you do it? It can on occasions make sense to consolidate your debts to reduce the interest costs overall. Or if you're struggling to make the repayments over a short time frame making them over a long time frame might make them more affordable (in the context of your monthly budget). But be careful as extending the period of repayment could make you pay more interest in the long run.

To work this out what is best will take some work on your part. You need to work out what the costs are under your current arrangements and look at the best alternative. Also take care if your plan involves swapping unsecured debt for secured debt as you risk losing the asset you've as security if you fail to keep up repayments.

If necessary take advice from a qualified financial advisor.

Is my home at risk with a bad credit loan?

If you use a homeowner loan as your bad credit loan then ultimately your home would be at risk if you failed to make payments on time and/or paid off the loan in full on time. This is because as a form of secured loan you have offered your house as the security.

In some extreme circumstances an unsecured lender could obtain a court order to take possession of some of your assets if you didn't repay what you had borrowed. However, this is rare and other solutions would be negotiated before this step was taken.

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