Find the right loan for bad credit
Compare loans from across the market
Whether it’s to pay for a new car to get to work or to cover a sudden and unexpected expense, sometimes you find yourself in need of extra cash. But if your credit score isn’t so good, your loan options may be limited.
Luckily, there are still options available: depending on how much money you need, you might be able to find a loan from a provider which specialises in loans for bad credit. With so many lenders out there, the main trouble can be choosing the right option.
That’s where MoneySuperMarket comes in. We work with providers from across the market, performing what’s known as a ‘soft search’ to see which loans you might be eligible for, in a way that won’t hurt your credit score.
Everyone in the UK has a file kept on them by the main banks and lenders, which records their history of borrowing money. This is known as your ‘credit score’, and it’s expressed as a number. The higher your credit score, the more reliable a borrower you are considered to be.
If you’ve had trouble repaying a loan or credit card bill in the past, that will be reflected in your score – and you’ll find it harder to borrow money in the future. Likewise, younger people or those from overseas can have no credit history at all. If this is you, you may still have options:
These are probably the most common option, as the lender offsets the increased risk through collateral. Secured loans are offered on the understanding that the borrower puts up a valuable possession– usually either their home or car – which may be repossessed if they default
Guarantor loans are designed for borrowers with especially poor credit, who have few other options. They are guaranteed by a family member or close friend, who promise to pay back the remainder if the borrower defaults. They often have high rates of interest, due to the extra risk
Some personal loans are available to those with less-than-perfect credit ratings. There’s usually a fairly strict limit to how much you can borrow, and you can expect much higher APRs, as without collateral or a guarantor, banks are worried you may default. These loans are quite expensive in the long run
Growing your credit score could give you a wider range of loan rates to choose from.
Check yours for free with Credit Monitor - then get free, personalised tips to help you nurture and grow your score.
No loan is offered without risk, both to the lender or the borrower. You should always think carefully before you take out a loan, but lenders consider those with lower credit scores as being in more danger of defaulting. Here are some things to think about:
The lower your credit score, the more expensive the terms you are likely to be offered, and the less you can borrow. Be sure that the repayment schedule will fit into your monthly budget – and beware that higher interest means the loan is more expensive overall
The consequences of defaulting can be expensive, and might involve collections agencies, forced repayment plans or even legal action. However, if you keep on top of your repayments, you won’t get in any trouble at all
Because bad credit represents a greater risk to the lender, you’re unlikely to be lent lots of money in one go. It’s wise to manage your own expectations of how much money you can – and indeed should – borrow, especially in light of the higher interest rate
Lenders will take other factors into account when considering you for a loan, including your income, how much equity you have in your home (if you want to use it as a security), and any outstanding loans you are still paying off
Lenders will take other factors into account when considering you for a loan, including your income, how much equity you have in your home (if you want to use it as a security), and any outstanding loans you are still paying off
If you manage to meet your repayment schedule in full and on time every month, your credit score will almost certainly rise as time goes on. The credit agencies like to see proof that people are borrowing responsibly, and this will help
Find the right loan for you and see which rates you’ll be guaranteed to get.
Tell us a little about yourself, your finances and the loan you want
We’ll search through loans from a wide range of lenders on the market
You’ll be able to sort loans by the overall cost and the likelihood you’ll be accepted
When you apply for a loan, it’s not always clear what deal you’ll be offered or whether you’ll be accepted. But when you’re pre-approved for a loan, you know the deal you see is the deal you’ll get – you’ll know where you stand, with information that will help you make the right choice.
When you’re pre-approved, the
loan amount, duration and interest
rate are all confirmed
When you know what you’ll be able to
borrow and how much it will cost, you
can choose a loan that’s right for you
This helps protect your credit score as
you’re less likely to be rejected when
you apply
Whether your credit score is excellent or not, you get a loan in the same way: by applying to a lender. Once you make an application, they will assess your eligibility by looking at your credit score and circumstances.
If you have poor credit, you’re most likely to be eligible for loan offers from companies which specialise in bad credit loans.
That depends on your own specific circumstances. In some cases, if you own your home, you might find it easier to apply for a secured loan.
If you have poor credit and are struggling to find personal loans, guarantor loans might be easier – but they depend on having a friend or family member to vouch for you.
It’s very easy to check your eligibility for loans online, and it’s just as easy to apply for a loan. Certain providers might approve you quickly, though most people with poor credit will be subject to more thorough credit checks – which can often take 24 hours or more. You’ll be notified on whether you are successful either by phone or email.
How to secure the best card or loan deal in a lending squeeze
Can you get a loan without a credit check?
Need a loan in a hurry? Make sure you're fully informed with our guide to emergency loans
If you’ve struggled with bad credit in the past but need money quickly, you may be worried about being rejected for a loan. Our guide covers how short term loans work and if you can get one with a low credit score... If you need money quickly but are worried you’ll be turned down for borrowing, our guide might be able to help
Being able to get money quickly with few credit checks may seem appealing to potential borrowers, but with high interest rates and the amount you can borrow being capped, they won’t be for everyone. Our guide covers how quick payout loans work and what you need to know
Is there a way of guaranteeing a successful loan application? If not, how do you maximise your chances of being approved? Our guide explains
A bridge loan can be a good solution for short-term borrowing. Our guide covers how bridge loans work so you can decide if they’re the right choice for you
Secured loans can be a way to borrow more, by using your home (or other valuable asset) as security. Understand how secured loans work in our guide with pros and cons to consider.
Secured loans can be a way to borrow more, by using your home (or other valuable asset) as security. Understand how secured loans work in our guide with pros and cons to consider.
The cheapest loan is not always the one with the lowest monthly repayments. Find out more with this guide.
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