Loans for Bad Credit
How Much Do You Need?
- Same-day funding
- Loans available up to £5,000
- No late, hidden fees
- Bad credits considered
Representative example: Borrowing: £1,200 Interest: 0.34% per day for up to 75 days (124% per annum, variable) Representative: 49.7% APR (variable).
Bad Credit Loans?
A bad credit loan is an unofficial name for what is essentially financial aid designed for those with a bad credit score or poor credit history. It is a practical reprieve for many consumers primarily because if you have a less than stellar credit score, it can be almost impossible to secure a loan from most banks and financial institutions. In fact, if you were to keep attempting to apply for a loan with a bad credit score and fail to get accepted, it can actually cause even more damage to your credit score.
However, with a bad credit loan secured from a specialist lender, you can easily secure a financial fix, be it for personal or business purposes. Moreover, loans for bad credit work much like any average loan in that you simply borrow a certain amount and pay it back in monthly instalments. And while they tend to come with higher interest rates than average bank loans, if no credit check loans are used responsibly, bad credit loans can often be a great starting point for a financial turnaround.
Types of Loans for Bad Credit
Secured personal loans are bad credit loans that usually require some form of collateral to be put forward, like a car or home. Naturally, these loans tend to offer more favourable rates and terms, and even higher loan limits. They also might be your only option if you need to borrow a sizable sum of money. However, this type of bad credit loan is ideally suited for those who are confident they can pay back the borrowed bad credit loan without any trouble. If you were to default on this loan for bad credit, then the lender will be able to repossess whatever form of collateral that you put up and sell it to reclaim the amount owed to them.
Unsecured personal loans allow you to borrow money without having to put up any collateral you own as security, so if you were to default on repayments, then no capital will be taken. However, the problem with this type of bad credit loan is that the lender can still file a lawsuit against you to collect the money owed. Plus, if you have below-average credit, then it’s almost impossible to get one. And even if you do manage to get a loan with bad credit, they tend to come with lower loan limits and the interest rates will not be as favourable.
Guarantor loans are a type of secured bad credit loan that requires a second party/co-signer to agree to make repayments should you end up defaulting on your payments. This can be a great option, especially for those who may not have any collateral to put up or have a non-existent credit history, but are still looking to secure a sizable loan for poor credit. However, do keep in mind that guarantor loans also come with high-interest rates, but this can vary between lenders of no credit check loans.
Why Choose a Bad Credit Loan?
Consolidate Outstanding Debt
Securing a bad credit loan allows you to easily consolidate all of your other debt, as instead of owing multiple parties small amounts of debt, your entire owed capital will be with the same lender. This helps you to significantly reduce the average interest rate across different financial institutions. Plus, it’s always easier to deal with a single payment deadline than having to pay outstanding money on different dates.
Quick access to cash
If you are dealing with high monthly payments on outstanding debt, then may find yourself unable to even cover some basic expenditures like food, electricity, gas, and so on. However, by taking out loans for bad credit, you can recover some of that disposable income to enjoy a higher quality of life, while you still continue to make progress towards a better financial position.
Improve your credit score
Taking out a bad credit loan and making your payments on time can often be a great way to steadily improve it, especially since most financial institutions will be hesitant to lend you money, to begin with. This way, should you ever need to make a huge purchase like a house, through on-time repayment of poor credit loans, you can start to steadily build a better credit score for a better financial future.
How Can I Get a Loan for Bad Credit?
When it comes to successfully applying for bad credit loans, the first thing that you need to do is to take the time to work out exactly how much you can comfortably afford to repay each month. And while you won’t always get the lowest interest rates due to your low credit score, it’s important that you focus on getting a bad credit loan that offers you the best payment terms possible, especially if this is your first time taking out one. You can always compare with different lenders to find the one that best fits your preferred criteria and financial ability.
However, you should also keep in mind that each loan application you send out will trigger a credit search on your report. And if your credit score is already low, you want to avoid doing that too many times, as it can make your situation even worse. Luckily, you can use our broker service to conveniently compare all bad credit loans UK offers from local lenders in one place, which should help make your search process a lot easier and stress-free.
Things to Consider When Applying for Loans for Bad Credit
What are the interest rates?
When applying for poor credit loans, you need to consider how much interest rate the lender in question is offering. Ideally, you want to choose a bad credit loan that offers you the lowest possible interest rate, which minimizes the amount you will have to pay every month. Typically, secured loans for bad credit that require collateral will usually offer you the lowest rate possible, as compared to an unsecured bad credit loan.
What is your payment plan?
This may seem obvious, but it is important that you first consider how you intend to repay the debt before taking one. How soon can you pay off the entire bad credit loan? What is the length of the poor credit loan? These are the types of questions you need to consider because defaulting on a bad credit loan can have serious consequences, like the involvement of collections agencies, and even legal action. In fact, it’s always best to make overpayments whenever possible, in order to minimise your debt as fast as possible.
Will the loan affect your credit score?
Bad credit loans are essentially a form of instalment credit, and as such, meeting your repayment schedule on time can actually benefit your credit score in the long run, as credit agencies and financial institutions always prefer to see proof that you have a habit of borrowing and paying back money responsibly. However, should you fail to make your repayments on time, keep in mind that it can damage your credit rating even further.
How Can I Get Lower Interest Rates and Higher Credit Limits?
Interest rates on unsecured bad credit loans have a tendency to vary widely depending on the lender in question and your credit score.
However, if you want to get a loan for bad credit at a lower interest rate and higher credit limit, then your only option is to be willing to accept more risk, which means putting some collateral forward. And this leaves you with two options to consider applying for; Secured loans or Guarantor loans.
A secured bad credit loan will involve you having to use your own home, car, or some other asset as collateral, meaning should you default on your repayments, you could end up losing it to the lender. Alternatively, a Guarantor loan involves finding a co-signer with a good credit score - be it a friend, co-worker or family member - who is willing to cover your repayments in the event that you end up defaulting.
So, while there is risk involved in both scenarios, the advantage of opting for either option is that since collateral reduces risk on the bad credit loan lender, they will be more than willing to offer you better rates or even higher credit limits in return.
Another option that can help you to convince the lender to give you a lower interest rate or higher loan limit is providing them with evidence of a consistent and reliable income stream. This should give them peace of mind that you still have resources available to make your bad credit loan payments, even if your credit score is currently lacking.
What do I do if I can’t make my repayments?
If you are unable to find the money to pay off your bad credit loan, the first thing you should do is to reach out to your creditor and explain your situation in full. You may be able to work out a different repayment schedule, agree to make a lump-sum payment that is less than the full amount to settle the debt or even put payments into forbearance albeit temporarily.
Why take out a bad credit loan?
If you happen to have a bad credit score and are in search of financial aid, then your best bet is to take out a loan for bad credit. This is because not only will you be able to get a quick financial fix without much hassle, but also because doing so and making sure that your repayments are paid on time can be a great way to improve upon your credit score as well.
Why do I have a low credit score?
There are a number of reasons as to why you may have a low credit score, but some of the most common reasons include; declaring bankruptcy, identity theft, receiving a County Court Judgement, having no credit history, failing to meet past loan repayments on time, etc.
How do I get a loan with poor credit?
It is important that you check your eligibility for no credit check loans before applying, which means working out exactly how much you can afford to repay each month and then using an online credit broker to compare available personal loans for bad credit from different lenders, in order to find the one that best suits your financial needs and capabilities.
Who can apply for a bad credit loan?
Loans for bad credit can be granted to anyone, as one as they can either put up some form of collateral or prove that they are able to pay back the loan, eg. show they have a stable income stream. However, before you apply, do keep in mind that these loans also come with higher interest rates, as well as lower credit limits than typical loans.
Can I apply for a loan if I have a bad credit rating?
Bad credit loans are specifically designed to cater to those with poor credit ratings, hence the unofficial term, “bad credit”. This means that even if your credit history is lacking, if not non-existent, then you will be eligible to apply for financial aid from a bad credit lender.
Get a Bad Credit Loan in Just a Few Clicks!
If you have a bad credit rating and are unable to secure a loan from a bank or financial institution, then a bad credit loan is the solution to all your problems. With loans for bad credit, you can get the financial aid that you need, and even start to rebuild your credit score, all for the sake of a better future!APPLY TODAY