Home → Finance →

The Easiest Loan To Get With Bad Credit In The UK

Written by, Marija Petkova

Updated August, 10, 2022

Lenders are much more likely to approve your loan application if you have a good credit rating, but that doesn’t mean you can’t borrow money with a poor credit history. 

If you’re looking for the easiest loan to get with bad credit in the UK, you’ve come to the right place.

Let’s dive in.

  • Type of loan: Unsecured
  • Loan amount: £1,000 – £5,000
  • Representative APR: 49.9% (variable) 
  • Loan term: 1-3 years

  • Type of loan: Unsecured
  • Loan amount: £300 – £1500
  • Representative APR:1296.5%
  • Loan term: 3 to 6 months

  • Type of loan: Secured and unsecured
  • Loan amount: £1,000 – £250,000
  • Representative APR: 39.9% (variable)
  • Loan term: 1-25 years

  • Type of loan: Unsecured; payday loans
  • Loan amount:  £50- £5000+
  • Representative APR: 49.9% (variable)
  • Loan term: 1-18+ months

  • Type of loan: Unsecured
  • Loan amount: £100- £1,000
  • Representative APR: 1228.67%
  • Loan term: 3 to 9 months

  • Type of loan: Unsecured
  • Loan amount: £1,000 – £15,000
  • Representative APR: 99.9% 
  • Loan term: 18 to 60 months

  • Type of loan: Unsecured
  • Loan amount: £500 – £5000
  • Representative APR: 59.9% 
  • Loan term: 1-3 years

  • Type of loan: Unsecured and secured 
  • Loan amount: £100- £10,000
  • Representative APR: 49.7% APR (variable)
  • Loan term: up to 75 days

What Are Bad Credit Loans?

Bad credit loans are types of loans that are available to people who have a less-than-ideal credit score or little to no credit history.

These loans for poor credit in the UK usually come with high interest rates and APRs to compensate the lender for taking on a high-risk borrower. Still some lenders offer better rates than others. 

For example, Now Loan has one of the lowest APRs out of all the lenders that offer bad credit loans, but how much you’ll end pay paying depends on your circumstances.

How Does A No ‘Credit Check’ Loan Work?

Although there are many UK loans for bad credit that are advertised as ‘no credit check loans’, in reality, all lenders in the UK have to perform affordability checks before they consider any loan application, per the Financial Conduct Authority’s (FCA) guidelines.

In most cases, what lenders mean when they say “no credit check loans’ is that they will conduct a credit check that won’t leave a mark on your credit report – also known as a ‘soft’ credit check– when reviewing your application. 

This check gives the lender enough information to make a decision for a short-term loan or any type of loan that’s of low value.

Most lenders like Dot Dot Loans and Likely Loans only perform a hard check (which will show up on your credit report) after you accept their offer. 

How To Get a Loan With Bad Credit?

Borrowing money with a low credit score requires putting in some extra work which will help you qualify for a loan and get good rates. 

Here’s what you need to do when applying for loan with a bad credit score:

  • Check your credit score: Checking your credit score will help you target the right lenders (those that lend to people with your credit score). The good news is most bad credit lenders don’t have a minimum credit requirement. 
  • Compare lenders: Every lender has different requirements and rates, so it’s worth shopping around and comparing your options. Easy loans for bad credit are usually more expensive, so try to find a rate you can afford and look for lenders that offer credit-building tools, like Ocean Finance, which can help you manage loan payment. 
  • Pre-qualify: Pre-qualifying for a loan will tell you what amount, rate, and repayment term you can expect. What’s more, it won’t affect your credit score.
  • Consider a co-signed loan: Adding another person to your loan can not only help you qualify for a loan (since another person’s credit and information are included in the application) but it will also ensure you get lower interest rates. 

Depending on the lender and the amount you want to borrow, lenders may take anywhere between 1-3 days to send you the money to your bank account. Most  loans for bad credit in the UK are paid out on the same day. 

If you’re looking for same-day loans, see Now Loan

Types of Bad Credit Loans

The most common loans available to people with a low credit score include:

  • Guarantor loans

Guarantor loans are good poor credit loan options because they help the person with the bad credit score get a better chance at qualifying for a loan and get better interest rates. This is because the lender will consider the guarantor’s credit score and income as well. 

Some lenders, like QuidMarket, even offer No Guarantor loans. 

  • Secured loans

A secured loan is a loan which requires the borrowed money to be ‘secured’ against an asset you own, such as a house, a car, or any other object of value. These cater to people with a bad credit score because they require collateral, which provides some security for the lender in case the borrower defaults on their payments.

  • Payday loans

A payday loan is a quick and relatively small unsecured loan that often incurs a high interest rate and is repaid when you get your next paycheck. They don’t come with a lot of requirements and are usually available to people with bad credit scores. If you’re looking for payday loan option, see our Wageme review.

Eligibility Requirements For a Bad Credit Loan

Most lenders that offer poor credit loans in the UK require applicants to:

  • Be at least 18 years old.
  • Be a UK citizen.
  • Have a minimum income.
  • Have a valid bank account, phone, and email address.

One lender that stands out when it comes to low eligibility requirements is Everyday Loans– it only asks applicants to be over 18 and a UK citizen, making it one of the most accessible direct lenders.

Worth noting: You can apply to any of these loans with a good credit score as well. It’ll only mean that you’ll get better interest rates.

Pros And Cons of Bad Credit Loans

Some advantages of taking out a loan for poor credit are:

  • Monthly repayments are evenly split over the loan term.
  • You can improve your credit score by staying on top of your payments.
  • Quick approval process.
  • Soft background checks that won’t affect your credit score.

The disadvantages of low credit loans are:

  • High interest rates.
  • Missed repayments can damage your credit rating.
  • Limited options.

Things To Consider When Taking Out a Bad Credit Loan

Here’s what you should look for when taking out a bad credit loan:

  • Affordability: Although lower credit score loans are accessible to people with bad credit, that doesn’t mean they aren’t expensive. When taking out a loan, it’s crucial to ensure that you can afford the monthly repayments.
  • Defaulting: Before signing the loan agreement, ask the lender how they handle missed payments. In most cases, defaulting on a payment will result in dealing with collections agencies, forcing repayment plans, and even legal action. So, it is best to get defaults removed from your credit file.
  • Repayment length: Some lenders offer longer loan terms than others. With Ocean Finance, for example, you can get loan terms of up to 25 years. 

Note that, in most cases, the longer the term, the more interest you’ll end up paying.

Alternatives To Bad Credit Loans

Depending on the amount you need to borrow, there are other forms of credit that you can look into before applying for a loan with a bad credit in the UK.

  • Credit building credit cards: A credit building card is a great option for those who have little to no credit history and want to borrow a small amount while building up their credit score. These cards come with high interest rates but they can help you improve your creditworthiness, provided that you pay your balance in full every month.
  • Overdrafts: With an overdraft, you can take a loan directly from your bank provider, up to a certain amount, with no term limit. Overdrafts incur high interest charges, but give you access to quick cash in case of an emergency.
  • Money transfer card: A money transfer allows you to move cash from the card to your bank account to give yourself a cash loan or clear an overdraft. Some money transfer cards offer 0% interest over a certain period.

Bottom Line

If you have a low credit score or no to little credit history and you need access to quick cash, then you can consider a lender that offers loans to people with a bad credit score.  

These loans often come with steep interest rates, so it’s best to exhaust all of your options and consider some alternatives before applying for a bad credit loan. 

However, if you’re in a pinch, a bad credit loan might be exactly what you need.

My name is Marija, and I'm a financial writer at DontDisappointMe. Although finance might not be everyone's cup of tea, my 10+ years of working in one of the biggest banks in my country, and my interest in extensive research on everything finance/investment-related, have made me somewhat of an expert in the field (if I do say so myself). No longer having the passion to work in a corporate setting, I decided that I couldn't let all of this knowledge go to waste so I started writing. And, here I am! Today I try to share my knowledge with my audience in the hopes of making this topic as simple and interesting as possible. In my leisure time, I like spending time with my family and travelling to new locations.