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A wise guide to…

Getting a loan with bad credit

It can be difficult looking for finance if you have bad credit, but not impossible. The best place to start is making an online application with a price comparison website and comparing lenders that accept those with poor credit before finalising the application with your chosen lender.

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Representative 49.7% APR (variable). Representative Example: If you borrow £2,600.00 over 36 months at a Representative rate of 49.7% APR and an annual interest rate of 41.00% (fixed), you would pay 36 monthly instalments of £126.61. The total charge for credit will be £1,957.89 and the total amount payable will be £4,557.89.
Choose Wisely is a trading style of Choose Wisely Limited and is a free to use price comparison website. Choose Wisely Limited is authorised and regulated by the Financial Conduct Authority as a credit broker not a lender, firm reference number 730574 and is registered with the Information Commissioner’s Office number Z3106681.
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A quick, easy way to get a bad credit loan today.

  • Borrow from £300 to £10000.

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  • Absolutely no fees, ever.

Representative 49.7% (variable).

How to get a bad credit loan in 3 simple steps.

Affordability assessment.

1 form - takes 2 minutes to complete and your data is 100% secure.

Compare products.

Choose from lenders that have accepted your application.

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If approved, the cash can be in your account in as little as 15 minutes.[†]

Table of contents

Written by Andrew Freelander
Read time: ~5 mins
Published: 4th April 2016 Updated: 6th March 2020

Looking for a loan with bad credit? This guide contains detailed tips with everything you need to know. We’ll cover which types of loans exist, who's applicable? What to do if you have very bad credit and everything in between.

What types of loans for bad credit are there?

Before we dive too deep, it's important for any prospective borrower to make the distinction that there are different types of personal loans for bad credit, including bad credit car finance and even bad credit mortgages. Taking that into account, there are specialised loans for people who have bad credit but "bad credit loans" don't really exist. To not complicate things we refer to bad credit loans throughout this article but let's start by taking a look at other types of online loans that could be considered for those with bad credit.

Bad credit loans for unemployed people

We work with creditors that consider people who are unemployed or receiving benefits. You may have to pay a higher rate than that offered by high-street banks because, in the eyes of a lender, lending to someone without regular income will represent a bigger risk. Beware, you may also be in this bracket if you are self-employe

Unsecured loans with bad credit

Unsecured personal loans, like those offered by companies such as Likely Loans, Everyday Loans and Lendable are not protected by collateral. Meaning, if you don't make your repayment commitments the lender can’t claim your property. They appear less risky compared to their secured loans counterparts, which are things like mortgages and logbook loans. If you default on a secured loan your property could be repossessed to reclaim the costs. Unsecured lenders will provide finance agreements to people who have less than glowing credit reports, the payments just tend to be more expensive.

Bad credit payday loans

One of the options for people finding themselves in unexpected circumstances, such as a situation like a car or a boiler breakdown, is bad credit payday loans. They are a quick solution until your next pay date and are usually for smaller amounts over shorter periods. That normally means APRs are higher than other loans and any missed payments can be costly, quickly damage credit scores, mount considerable debts, affecting your ability to gain access to products and influence future borrowing. Be sure to fully understand the terms of any agreement you enter if you feel this is the only option to gain the funds needed in financial emergencies.

Guarantor loans

If you're looking for an alternative solution, or if you need larger amounts, looking for a loan with a guarantor will offer favorable terms to anyone needing financial assistance. They offer competitive rates by looking at different factors like having someone support your application who has better financial standing. They open up borrowing opportunities to people who have had difficulties with financial commitments in the past. Amigo Loans have the largest established reputation. There are other affordable options such us George Banco and Bamboo Loans.

No guarantor loans

Some loans companies require guarantors but not all of them. If your eligibility is low, and you don’t have someone to support your application, there are borrowing options if you’re willing to secure assets like your car or house to the agreement in case you miss repayments.

How do I get a loan with bad credit?

Our lenders understand maintaining a perfect score isn't easy and it's common to have missed payments – but this shouldn't stop you from getting your loan funded. Our application service allows you to enter your details, in order to provide you with a list of lenders most likely to accept your application and under what terms. Based on:

  • Your income and outgoings
  • Credit history and score
  • If you're homeowner or a tenant
  • If you're a UK resident
  • If you're the right age
  • If you hold a UK bank account

Here’s the step by step process:

  • Click the GET ACCEPTED button anywhere on this page
  • Fill out the form and hit continue to the next stage
  • Complete the form, selecting your marketing prefernces and click GET ACCEPTED one last time
  • Wait while we securely send your data to our carefully selected lenders, once they all respond with a decision we'll show you your results
  • Compare the cheapest lenders who have accepted your application
  • Click GET THIS LOAN on your chosen result to continue to the lenders website and finalise your application

It's possible you may be offered a lower amount than good credit customers, as a way for the lender to manage risk. Any final lending decision is down to the discretion of the lender. In addition, anything you can do to add extra security to your application will maximise your chance of approval. This could include adding a guarantor with a good credit rating to your application.

You can look at ways to improve your credit score, this will increase your chances of being approved for products in the future. To improve your credit rating, you can do things like giving the electoral registration office your personal information, which indicates to lenders you're on the electoral register. You can close credit cards you do not use and consolidate your debts to pay them off.

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 the value of the potential benefits of 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 we feature appear on the financial services register. We're 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?”

What are the alternatives to low credit loans?

Where do you start if you require an alternative to a low credit loan? If you have problems covering payments historically which products should you look at? How can you spot the difference between a low credit loan and something else?

  1. We have different pages on our website to cover any individual requirements. If a poor credit loan isn't for you, you'll likely find what you're looking for by using our site navigation.

  2. Alternatives are credit line products such as SafetyNet Credit, doorstep loans, logbook loans, credit unions, subscription loans and pawnbroking.

  3. The 2 key characteristics of low credit loans are often APRs of 49% and above on loan amounts of £100 up to £15000.

Can I get a loan with bad credit?

It's possible to get a loan with a less than desirable credit file. You may find it harder to pick the product that matches your financial situation but we believe our Get Accepted application process is the best place to figure that out. It'll tell you which lenders will accept your application.

Bad credit loans FAQs

Why should I get a bad credit loan?

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.

Are bad credit loans legit?

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.

What are the advantages of bad credit loans?

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.

What are the disadvantages of bad credit loans?

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.

What banks offer bad credit loans?

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.

Can I get bad credit loans without credit check?

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.

Can I apply for bad credit loans without a guarantor?

If you need bad credit loans without guarantor involvement 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.

Should I choose a bad credit loan or a credit card?

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.

Are there any bad credit direct lenders in the UK who offer guaranteed approval?

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.

Can I get a bad credit loan if I’ve defaulted on accounts before?

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.

Can I get a bad credit loan with previous CCJs on my credit file?

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.

Can I get a bad credit loan if I’ve been declared bankrupt?

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.

Andrew Freelander
Written by
Andrew Freelander
Brand & Content Manager at Choose Wisely

Andrew joined Choose Wisely 5 years ago, originally working in a design capacity to make sure the website was simple to use. Most notably he worked with the Consumer Finance Association to design the comparison table of choice for High-Cost Short Term Finance products.

The quickest way to find the best bad credit loan for you.

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Important Information.

All of the information in this guide is correct at the time of writing.

Rates shown are quotes based on your personal circumstances, are subject to status and are available to those aged 18 and over. Rates available range from a minimum of 3.9%APR to a maximum of 1575%APR Representative and loan repayment periods range from 3 to 60 months.

[*][†] Once accepted, your loan can be transferred to you in as little as 15 minutes. The time that it takes for the loan to show in your bank account will depend on your lender and your bank.

If you need financial advice you can visit stepchange, speak to citizens advice, call the national debtline or speak to moneyadviceservice.org.uk.

If you've been declined, please refer to your credit report to gain an understanding of why before making further applications.
Your score can be accessed for free via any of the main credit reference agencies such as Credit Karma, Clearscore or Experian.

Warning: Late repayment can cause you serious money problems. For help, go to moneyadviceservice.org.uk