Compare Bad Credit Loans
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SECURED LOANS: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE, LOAN OR ANY OTHER DEBT SECURED ON IT.
We compare loans that can be paid back over terms of between 1 and 25 years. The APR interest rate you’ll be charged depends on your personal circumstances, and will be between 3.2% and 99.9%
This is a representative example of what it may cost: a Loan of £7,500 over 60 months at 3.3% APR would equate to monthly repayments of £135.60, and the total cost of the loan that you pay back would be £8,136.22
Bad credit loans
A bad credit loan, as its name suggests, is a loan specifically designed for people with a poor credit history.
There are plenty of reasons why you might have a bad credit rating, from having failed to keep up with payments on a previous credit agreement, to having a County Court Judgement (CCJ) against you. Even if you’ve never had a loan or credit card before you could end up with a poor credit rating because lenders can’t access any evidence to show that you could manage your borrowing successfully.
Normally it is virtually impossible to borrow from a mainstream lender if you have bad credit history, which is why there are specialist loans and credit cards available for people with poor credit records.
Loans for poor credit – what you need to consider
If you have an adverse credit rating, here’s what you’ll need to think about before applying for a bad credit loan:
- Secured vs unsecured: Each loan type has its pros and cons, however if you fail to keep up with repayments on a secured loan you risk losing your home.
- Interest rates: Interest rates vary according to how much you are looking to borrow and can be higher for those with less than perfect credit scores.
- Repayment duration: It’s important to note that the longer it takes to pay back the amount you’ve borrowed, the more you’ll pay in interest. Make sure the amount you agree to pay back each month is affordable
- Impact to your credit score: Failure to keep up with your loan repayments could seriously affect your credit score and scupper your chances of applying for credit in the future.
Advantages and disadvantages of bad credit loans
The biggest advantage of a bad credit loan is that you are actually able to borrow money, which you otherwise wouldn’t be able to do because of your poor credit history.
This can provide a real financial lifeline to people who need a loan either to cover a major purchase, or perhaps to consolidate other debts.
Another advantage is that having a loan can actually help people with a bad credit rating to repair their credit status. This is because, provided you always make payments on time, you demonstrate that you can manage your money responsibly.
The biggest drawback with this kind of loan is that interest rates are normally very high relative to standard loans. As applicants for bad credit loans have usually had problems managing their finances previously, they therefore represent a much higher risk to lenders, and therefore the rates they are offered are much higher than they would be for someone with a good credit score.
Find the right loans for you
There are many different loans for people with bad credit, so always do plenty of research before applying to make sure you have found the best loan to suit your needs. You can also compare debt consolidation loans if this is suitable for you.
Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.