Written by, Marija Petkova
Updated November, 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.
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.
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.
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:
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.
The most common loans available to people with a low credit score include:
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.
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.
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.
Most lenders that offer poor credit loans in the UK require applicants to:
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.
Some advantages of taking out a loan for poor credit are:
The disadvantages of low credit loans are:
Here’s what you should look for when taking out a bad credit loan:
Note that, in most cases, the longer the term, the more interest you’ll end up paying.
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.
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.