Loans for People with Bad Credit
Compare Poor Credit Loans Options - from £100
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 - your credit rating need not be a problem.
Since 2005 we've specialised in helping people who have a poor credit record. As a no fee broker our range of "bad credit" loans is wide. They are designed to help when you don't qualify for ordinary credit products.
- Declined elsewhere?
- CCJs? Arrears? Defaults?
- Self employed? No accounts? No proof of income?
- Part time employed?
- No credit history?
- Poor/adverse credit history?
Typical bad credit loan options
The main alternatives available to those with a poor credit rating are:
The difference between credit rating and affordability
When you apply for credit the provider will want to know two things:
- how reliably you have repaid loans and credit in the past - they'll look at your credit file.
- whether you can afford the repayments on any new loan made to you - they'll look at your income and outgoings to assess its affordability.
Not being able to afford additional repayments is likely to be a deal breaker, while your credit history is more likely to simply affect the cost of your new loan and whether you'll be required to provide security.
A poor credit score will affect the cost of your loan
Having a bad credit rating puts a lender on alert. They compensate for the extra perceived risk by charging a higher interest rate. You'll also notice that if you are prepared to offer an asset as security or provide a guarantor that you might be able to reduce that interest rate somewhat. Effectively you are opting to take on some/all of the risk the lender had.
Things you should consider
If you are thinking of applying for a poor credit loan because of your adverse credit score you should think about:
- Interest rates: typically you'll pay a higher interest rate if you have a poor credit rating
- Unsecured vs secured: to get a better interest rate you could provide security, but are you really prepared to lose your asset if you default on your debt repayments?
- Your credit score: if you do borrow more and make repayments on time and in full then you can improve your bad credit rating. If you fail to then you will make it worse.
- Borrowing term: as with any form of credit the longer you are in debt for the higher the total interest on that debt will be. This is made even more noticeable by the higher interest rate you will be paying.
- Loan amount: only borrow what you really need.
Key facts about bad credit loans
Looking at the applications we get for this type of loan there are some obvious trends:
- Debt consolidation is the most common purpose - to make monthly repayments on existing debt more manageable
- People on lower incomes tend to have a poorer credit rating - with a higher proportion of income required for for meeting life's basic expenses and with greater job and income insecurity this is unfortunately the case.
- It may not surprise you but younger people tend to have a worse credit score perhaps linked to lower incomes and their spending habits.
Poor Credit Loans Explained
Types of Loans for Bad Credit
There are a range of loans that can help people with some form of adverse credit rating. There's no single "bad credit loan". Typically these loans have higher costs or need some form of security or a guarantor. Below are summaries of each type of loan. You can compare them and click through for more detailed information. Your choice will depend on your personal circumstances and why you need the loan. You can find out more about credit scores and how to improve them.
Personal Loans (bad credit)
- Unsecured Loans up to £25,000
- 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%
Guarantor Loans (large/long 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%
- 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 1270%
- Borrow up to £1000 for up to 30 days
- 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 1270%
- 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%
- PCP & HP plans
- Borrow from £1,000 to £50,000
- 80+ products / 15+ lenders
- Keep payments low by not owning vehicle
- No deposit options available
- Poor credit acceptable
- Representative APR 20.1%
- Secured loans up to £250,000
- Repay over 5 to 25 years (i.e. long term)
- Access your home's growing value
- 95% max LTV (higher in special cases)
- Adverse credit plans available
- You must own your home & have a mortgage
- Secured on the value of your property
- From 3.73% APR (Rep. 9.1% APRC)
- 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
- Adverse credit acceptable (credit check done)
- Trusted direct lenders
- Representative APR 189.9%
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)