Bad Credit Loans.

You've found yourself in a tight situation and you need a bad credit loan.

A bad credit loan can give you quick cash if you choose wisely.

The quickest way to find the right loan

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Representative 49.9% APR. Representative Example: If you borrow £1,000 over 12 months at a representative rate of 49.9% APR and an annual interest rate of 49.9% (variable), you would pay 12 monthly instalments of £103.06. The total charge for credit will be £236.72 and the total amount payable will be £1236.72.

Bad Credit Loans.

What is bad credit?

Having bad credit means that you have a low credit score. The lower your credit score, the riskier you become to a lender. So if you have poor credit, it's important to know where you stand before you apply for a bad credit loan so that you don’t get declined.

Do I have a bad credit rating?

If you have a low credit score it's probably because you've either:

  • Missed a bill or repayment in the past (this could be for anything, not just for a loan)
  • Never borrowed money or used credit before

I’ve never had a loan, why do I have bad credit?

When you apply for a loan (or any type of finance) lenders want to be sure they will get their money back.

If you have credit history then it’s difficult for them to know that you can be trusted to repay what you've borrowed? If you've never borrowed money before you could pose a higher risk to lenders and this risk is reflected in your credit score.

Unsure if you have bad credit or if you should be looking for a bad credit loan? Check out our ultimate guide to borrowing with bad credit.

I have been declined a loan because of bad credit - how do I borrow?

Don’t panic! You're not alone and you’ve got options. You just need to know where you stand so you can Choose Wisely. Find out the loans you're eligible for now.

What kind of bad credit loan is right for me?

The type of bad credit loan that is right for you depends on a few different factors: How much you're looking to borrow with a bad credit loan, the length of time over which you want to repay the loan and your personal circumstances. For example If you're looking for a short term bad credit loan it may be cheaper to use a bad credit credit card. If you're looking to borrow a larger amount over a longer period then your greatest chance of acceptance will be if you can find a guarantor. Each product will have different pro’s and con’s and minimum criteria so compare your options first to find the product that best suits you. Want to compare bad credit loans? Find out who you're eligible for first.

If you're looking for a loan to pay a regular bill like council tax or your mortgage, then borrowing more is not the answer. You can speak to the company who supplied the bill as they should be able to offer a solution such as:

  • Flexible repayment plans
  • Reduced repayment periods or paused repayments

You can also get free financial advice at the Money Advice Service.

Guarantor loans for bad credit

Missed a few payments in the past but got your finances back on track? If so then a guarantor loan is an option worth considering. Find out more about guarantor loans by reading our guide.

As the name suggests you will need a guarantor when applying for a guarantor loan. This is usually a friend or family member but they will need to have a good credit history and be able to cover your repayments if you can't.

Being a guarantor is a big commitment so be sure to talk this through with your guarantor thoroughly before you apply.

Need more info? Our video on guarantor loans for bad credit explains all.

The main benefits of a guarantor loan are:

  • High acceptance rates
  • Reasonable APR (in comparison to other bad credit options)
  • Loans from £500 - £15,000

Compare guarantor loans on Choose Wisely.

Credit builder credit cards

What are credit builder cards?

If your credit history isn't great then a credit builder credit card (or bad credit credit card) is an option, especially if you're looking for a small amount of cash over a short period of time.

There are a number of different cards available, each with different credit limits and acceptance criteria which cover most circumstances.

You can compare a range of credit builder cards for bad credit on Choose Wisely.

What's great about a credit card is that if you clear your balance each month you won't pay any interest. However, if you let your balance mount up it can soon get expensive.

For more information on using credit cards to help rebuild a bad credit score, our guide has some useful tips and advice.

High Cost, Short Term Bad Credit Loans - Payday Loans

Our short term loan guide explains just how payday loans and other quick loans for bad credit work in more detail.

High cost short term loans, or payday loans as they are commonly known, are designed to offer quick cash in an emergency.

Payday loans are now heavily regulated by the FCA, these short term loans are expensive and are not a solution to cover everyday costs like rent or bills. Before you go down the route of a short term loan consider your options.

Need cash quick and unsure of your bad credit loan options? Our short term loan guide explains all and outlines your options.

Other types of short term loans for bad credit

Peer to Peer Loans

What is peer to peer lending?

Peer to peer lending is a form of borrowing between individuals, matched up based on how much they want to borrow and lend, without a bank, building society or traditional lender being part of the process.

With relatively low APRs on offer if you're approved for a peer to peer loan, they could be a great option if you have bad credit and need to borrow money.

With relatively few companies offering peer to peer lending we don’t have a comparison table ready just yet, however it's worth looking at short term specialist The Money Platform and guarantor loan provider, Guarantor My Loan, which will both consider applicants with poor credit.

Doorstep Cash Loans

Doorstep loan lenders will deliver cash right to your door. Similar to payday loans, this is a very expensive way to borrow. If you’re concerned you have very bad credit, before you consider a loan to your door, make sure you have compared all of your options.

If you apply for a doorstep loan, be aware that it can take some time for the application to go through - this is not a 'quick loan'. You can compare doorstep loans using the Choose Wisely Doorstep Loans comparison table.

Logbook Loans

If you own a car that is less than 10 years old, then a car logbook loan is an option for bad credit borrowing.

With a logbook loan, you are signing your vehicle’s ownership over to the lender, until the last repayment has been made in full. You'll still be able to use the car, but a logbook lender will hold onto the V5 certificate (the 'logbook') so that they can sell off the vehicle if you fail to pay off the loan. This comes with the obvious risks so as always if you have any doubt you can afford the repayments then don’t apply.

Compare bad credit loans and check your eligibility

Am I guaranteed to be accepted for a bad credit loan?

No. Each time you apply for a loan your details will be checked by the lender against a list of ‘acceptance criteria’ which usually includes the following:

  • Your income and outgoings
  • Credit history and credit score
  • Whether or not you own a home
  • If you're a UK resident

Each lender has their own set of benchmarks that they use to gauge eligibility. Here at Choose Wisely we have the Bad Credit Lender library which contains all of this information to review before you begin your application.

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