Can I get a loan with bad credit?
It is possible to get a loan if you have a poor credit rating, but it becomes more important to understand and compare your options before you apply. To provide a starting point, here are the some of most popular types of loan that customers search for when looking for a bad credit loan.
Compare bad credit direct lenders
Where to get loans with poor credit?
There are many different websites to help people get traditional loans but it pays to be careful. Many sites claim to offer things like guaranteed approval, high acceptance rates, impartial advice, hassle-free affordability checks, no additional fees on anything borrowed, or flexible repayment periods to potential borrowers.
On the surface these "attractive deals" sound like they will play to your advantage and whilst partially true in some cases, some so-called financial experts don't have borrowers best interest at heart.At best you can run into trouble paying for a credit checking service you don't use, at worst they can force people in further financial difficulties. That's why we suggest making the Choose Wisely website your go-to for any initial application.
All of the lenders featured on Choose Wisely appear on the financial services register. Choose Wisely is making a stand for financial inclusion and we're vowing to make it safe for you to compare banking and borrowing products.
Which loan company is best for poor credit?
In short, there is no one company that is best for people with poor credit. This is because lending decisions are based on the individual and their situation. We think anyone searching for a loan should instead ask… ”which loan company is best for me?”
Bad credit loans FAQs
If you need cash for life’s hurdles then bad credit loans are suitable for those with adverse credit history, few instances of prior borrowing, and those that are new to the UK. It may not be the cheapest way to borrow, this time, but it might help you get the cash you’re looking for.
With any product, there are less than friendly providers. The key is spotting the real from the fake. We’ve removed that potential pitfall for you. All of the products featured on Choose Wisely are legitimate and registered with the Financial Conduct Authority before they're shown on this website.
If you’re new to the country, have a thin file or a poor score based on past lending then bad credit loans have their advantages. Lenders are more likely to be accepting of adverse credit history. They may also help improve your credit score if you keep up repayments demonstrating responsible lending behaviour.
The main disadvantage is the cost, it will usually be more expensive to borrow if you have a poor credit history. Evidence of multiple high-cost loans on your file may be viewed negatively by future creditors as they demonstrate a willingness to accept expensive, short term products.
Most banks offer loans with lower APRs and usually offer a range of APRs depending on your creditworthiness. These tend to be for those with good or fair credit, but it’s worth speaking to someone at your local branch to see what they would advise.
No. Traditional lenders check your credit file to assess the level of risk you represent. They determine this from your score and if you have missed payments in the past (among other factors). As part of our application process, the lenders we feature run a ‘soft credit check’ and whilst this shows on your report it doesn’t impact your score. When you complete an application with a lender they'll run a hard credit check to verify your personal details and provide a final lending decision.
If you you don't have a guarantor there are no-guarantor products on Choose Wisely. They have higher APRs as lenders don’t have the security of a guarantor to support your application, so they account for the risk by making borrowing slightly more expensive.
Unfortunately, it's not a ‘one size fits all’ approach as both have their pros and cons depending on your personal situation. Some cards offer similar rates to bad credit loans but may have other fees included. Some have higher rates but provide a constant line of credit. It’s important to take enough time to consider any borrowing decision before you dive in.
There are no authorised direct lenders in the UK that offer guaranteed approval. Any responsible lender has an obligation to perform adequate affordability checks on every customer to ensure they won't further damage their credit health and/or lives. If you see the promise of ‘guaranteed approval’ it’s usually a telltale sign not to be trusted.
It can depend on how recent the default activity was. Defaults clear your report after 6 years from the date of default. It's possible to find a product if you’ve had a previous default, however, it may be trickier and you may be asked to provide extra information showing account activity for longer periods.
You can still apply for a loan with previous County Court Judgements. Bad credit lenders take a reasonable view of previous financial problems. Having CCJs on your file can remove some options as only select lenders will take on the risk.
It’s not impossible to get a loan if you’ve been declared bankrupt but it is much harder. If a lender accepts your application it will likely only be for a relatively small amount. If you’re discharged from bankruptcy there’s no limit on borrowing but it's still difficult to find lenders that will accept your application. Especially in the 6 year period from the date of bankruptcy as it still shows on your report.