Bad credit loans

Bad credit loans are for people with low credit scores, or who have little to no credit history. These loans typically have higher interest rates and greater restrictions than other loans however, they can be useful if managed responsibly.

Those applying for a loan in the UK must have their credit history checked. Lenders not performing a credit check are breaching the rules set by the UK regulator, the Financial Conduct Authority (FCA). All lenders must show they are lending responsibly, and this includes having a responsible lending policy in place, that includes credit checks and affordability tests.

Some lenders offer to check your likelihood of being accepted for a loan by completing a soft credit check before conducting a full credit check. The difference being that a soft credit check does not leave a note on your credit file.

If you are looking for a loan in the knowledge that you have a poor credit score, then a bad credit loan could potentially help. You could either apply directly to a specialist bad credit lender shown in our table above or use our loans eligibility service to see which lenders are most likely to accept you, without this showing on your credit file. You’ll be able to see which lenders are most likely to accept your loan application and can then complete your application in full. The process is quick and easy to do.

There are lenders that specialise in helping those with a bad or very bad credit history, even if you have been turned down for a loan by a mainstream lender. You will need to show that you can afford the loan, are earning a good level of income and have overcome your previous difficulties with debt. Bad credit loans usually have higher interest rates than those available from high street banks and mainstream lenders. Our pre-approved loans service will show you those lenders with that are most likely to accept your loan application.

If you have had issues with your credit history or a have a bad credit score, then you will need to speak to a loans broker or look for a non-mainstream lender. It’s less likely for high street banks to offer bad credit loans. Instead we’ve listed in the chart above those specialist lenders that accept applications from those with bad and very bad credit. You could consider a personal loan, guarantor loan or a secured loan if you are a homeowner.

A personal loan is an unsecured loan that uses your credit history to decide if a lender will give you a loan. This also affects the interest rate and amount of loan you are offered. You can get a personal loan with a previous bad credit history but may find you are offered a guarantor loan instead.

A guarantor loan is a type of loan where someone must act as your guarantor for the loan, this means they commit to paying your loan should you default and not pay it. Guarantor loans are designed for smaller loans ranging from a few hundred to a few thousand pounds. Our pre-approved loans service includes guarantor lenders and you could receive a decision in minutes.
Read our guide to guarantor loans.

If you are looking to borrow more than £10,000 then a secured loan is an alternative. This is where you have an existing mortgage and use your home as security for the loan. You should remember that your home is at risk if you do not pay your secured loan. Read more about secured loans.

If you need to buy a car on finance, then there are a range of options including personal contract hire, loans and leasing. Read more in our guide to car finance. You can also use your car as security for a loan, although this does come with risks and can be an expensive way to borrow money.