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Loans for people with bad credit

Getting a loan is tenuous enough a process under normal circumstances, but if you've had a CCJ, default, IVA or similar credit problems in your recent past, it can seem like an impossible task. But worry not, there are lenders that will make it easier for you.

Compare loans:

  • You must be aged between 18 and 75.
  • Direct lender, no application fee.
  • Bad credit loans for tenants or homeowners.
Representative APR:
Borrow up to £12,500 for a period of 2 to 5 years.   Apply Now
  • You must be employed with a regular income.
  • You must be over 18 with a valid debit card.
  • No penalty for early repayment.
Representative APR:
Borrow from £1,000 to £5,000 for a period of 1 to 3 year.   Apply Now
  • You must be aged between 18 and 70.
  • Have an income of more than £700 a month.
  • Self-employed are welcome.
Representative APR:
Borrow from £1,000 to £5,000 for a period of up to 2 year.   Apply Now
  • Any purpose loans for tenants or homeowners.
  • Bad credit, past CCJs, IVAs or defaults.
  • No upfront fees.
Representative APR:
Borrow from £100 to £1,000 for a period of up to 1 year.   Apply Now
  • A cash loan delivered to your home.
  • Bad credit welcome, low weekly repayments.
  • Applicants must be over 21.
  • No upfront fees.
Representative APR:
Borrow from £200 to £1,000 for a period of up to 34 weeks.   Apply Now

Tips on getting a bad credit loan

1. Secured loans
These are loans where the lender requires some collateral before they can approve a loan, this normally means a home with some equity. Other types of secured loans include Pawn broker loans, where you can pawn anything of value to secure the loan, and logbook loans where you use your vehicle as the collateral.

Collateral provides lenders with a safety net; they know that should you fail to pay back the loan, at least there's a way to recoup their money. This makes things easier for them, if you're a homeowner, the equity in your property can mitigate a bad credit rating and make it easier for you to get credit.

2. Unsecured loans
These are personal loans whereby the lender doesn't require collateral, if you fail to repay the loan, your possessions are not immediately at risk.

In this instance, the lender relies on the trust put in you to pay back the loan, this makes it a risky loan. Having a poor credit history elevates that risk; this is why unsecured bad credit loans typically incur very high interest charges.

Other disadvantages include:
  • - Loan amount: lenders prefer to keep unsecured loans at low amounts perhaps because of the risk involved; most UK lenders do not exceed £25000.
  • - Although the loan isn't secured, if you default and are referred to collectors, your assets might be repossessed.


1. Credit cards
If you are unable to get a loan due to a very poor credit rating, a credit card might be a viable alternative since approval is relatively easier.

Another advantage of credit cards over loans is flexibility; with a loan, you agree to a set repayment period (e.g. 5 years) whereas on a credit card you can pay back the money at any point. The money you've paid back also becomes available credit, which you can re-use should you need it in the future.

2. Payday loans
These are loans that you take out on the promise of paying the full amount back at the end of the month, typically they're only available to people that are currently employed. There is a credit check, although its influence is not as much as it would be on a loan.

Payday loans are ideal for people that need small amounts of money, typically up to £1000, and can pay it back in a short period of time.

3. Remortgage
If you are a homeowner and have some equity in your property, it might work out better to remortgage rather than take out a loan with bad credit: remortgaging might not substantially change your monthly repayments whereas a loan would create an extra payment to make every month.

If you have trouble managing your debt or need any advice on money matters, visit the Money Advice Service.