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Bad Credit Loans

Looking for a bad credit loan? You’re far from alone. More UK consumers than ever are classed as having ‘bad credit’. They are saving less than ever, while facing mounting costs and rising bills.

Loans which are available to people with less than perfect credit ratings could be an essential financial lifeline when facing an emergency. Applicable for those who have adverse credit, they promise fast funds that are generally available the same day.

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Representative Example: Amount borrowed: £250 for 3 months.Number of repayments: 3.Interest rate p/a: 292% (fixed).Each repayment amount: £137.21.Total repayable: £411.63. APR 1272% Representative

What is bad credit?

Bad credit describes a previous failure or failings in keeping up with repayments on a financial contract – such as a cash loan, car loan, overdraft, mobile phone contract or credit card.

There are many myths and misconceptions that surround the topic of bad credit. Contrary to popular belief there’s no such thing as a ‘blacklist’, nor is there a single credit score for each individual. Instead you have three different scores from the three main different Credit Reference Agencies: Experian, Equifax, and Callcredit.

Lenders will refer to one or more of these providers when assessing whether to lend money to you; 55% of lenders use Equifax, 77% use Experian and 34% use Callcredit.

Each Credit Reference Agency provides free reporting tools for consumers. Callcredit offer a tool called Noddle, while Experian offer CreditExpert and Equifax offer ClearScore.

Credit Reference Agency Credit Score Scale Average Score in the UK Maximum Score
Callcredit – Noddle Very poor: 1
Poor: 2
Fair: 3
Good: 4
Excellent: 5
611 710
Equifax - ClearScore Very poor: 0-279
Poor: 280-379
Fair: 380-419
Good: 420-465
Excellent: 466-700
380 700
Experian - CreditExpert Very poor: 0-560
Poor: 561-720
Fair: 721-880
Good: 881-960
Excellent: 961-999
Mid 700s 999

Reasons for having a bad credit score:

  • Non-existent/limited use of credit
  • Late repayments
  • Going over an overdraft limit
  • Missing payments
  • Being declared bankrupt
  • Having a County Court Judgement (CCJ) made against you
  • Entering an Individual Voluntary Arrangement (IVA)
Those who suffer from a less than perfect credit score will find that their applications for credit are often refused, and when they are approved that they have to pay higher APR rates owing to the heightened risk that lenders perceive them to be.

What is a bad credit loan?

For those impacted by a bad credit record, finding a lender who’s willing to consider lending can be a struggle. For these consumers poor credit loans are often a solution.

Designed for those who have been far from perfect in their past financial dealings, loans for bad credit are generally subject to a relatively small amount of finance lent over a short period. For example, CashLady lender's loan amounts vary between £80 to £2000 for between 2 and 6 months.

If you want to know more what bad credit loans are, this article may help.

Loans for bad credit in the UK

The market for loans for bad credit in the UK has exploded in recent years, and today more lenders than ever cater for those with poor credit histories. Whilst this rise in choice has been good for consumers, it has also introduced complexity and emphasises the need for thoroughly comparing your options before accepting a loan offer.

How do loans for bad credit work?

Loans for those with bad credit work just as ordinary loans do, however the acceptance conditions are more relaxed in relation to the applicant’s credit history.

When applying you’ll request an amount over a set period, on top of which interest will be charged. Here’s a detailed overview of how loans with bad credit work at CashLady.

  1. You apply for an amount between £80 and £2000
  2. A credit check/reference is run
  3. A loan offer is made detailing the APR and repayment period
  4. You accept the with an ‘e-signature’
  5. Your funds are sent the same day
  6. Repayments are made over the set period
  7. Since the loan is repaid, a positive marker is usually left on your credit file

Bad credit loans with direct lenders

Applying for bad credit loans directly with a lender has a number of potential problems.

First, you may not receive the best rate. However beyond this, there is also the important issue of credit searches that are undertaken by each lender you apply to. These searches leave a mark on your credit file, and applying for what can look like multiple loans can damage your chances of securing finance further.

Last of all, researching and applying with more than one lender takes time, time that you may be short of if you need your funds in a hurry.

Finding the best bad credit loans online

To discover the best suitable loans for bad credit and a financial solution that most suitable for your needs, you should give serious consideration to using an FCA authorised credit broker.

Credit Brokers, such as CashLady, have access to a network of varied lenders, which can ultimately help you access the amount of funds you need, over a period that’s suitable in terms of repayment amounts.

Advantages of using a credit broker like Cashlady

Short term loans for bad credit

Loans for bad credit typically span over a short time period, and generally last from a few weeks to a few months. This short time period means that bad credit loans are best suited for emergency situations. CashLady loans run over a period of between 3 and 6 months. Given the shorter period of this finance, and the fact that individuals are applying with poor credit ratings, these loans are also referred to as high cost short term loans.

FCA Regulated short term lenders are obliged to ensure that affordability guidelines can be met prior to approving an applicant. As such you need to be confident that you can meet your future payment responsibilities in relation to the loan, including any interest.

How to avoid a bad credit loan?

Avoid a bad credit loan if you think you are unable to repay the credit in time and in full

Bad credit can happen to anyone, even the most prudent of spenders. Some of the most common reasons people fall into debt include:

  • Fees on late payments
  • A fall or loss in income
  • An accident that prevents employment
  • An unexpected outgoing
  • An expensive emergency
  • Poor budgeting
  • Divorce
  • Underemployment

Given the fact that bad credit can take years to repair, you may have few options when it comes to accessing funds. As such the only way that you may avoid them is to consider and choose another form of finance. For future reference, you may want to read our guide on avoiding getting into debt. We have also created a series of guides on how to rebuild your credit which you may find useful.

Online Loans for bad credit - how does it work?

Loans for people with bad credit ratings can in most cases be applied for online (as opposed to over the phone or in-person at a financial branch). This simplifies the process and means that you can apply 24/7, 365 days a year, allowing access to emergency cash when you need it.

The online process with CashLady involves a single application which is then processed by our specialist lending partners, including Quickquid, Sunny, MyJar and LendingStream.

The Advantages of a loan with poor credit ratings

The advantages of a loan with poor credit ratings

The main advantages of bad credit loans include:

  • Access to finance for those with a less than perfect credit record
  • Fast access to funds, if approved
  • A starting point to rebuild your credit
  • A flexible solution that allows you to borrow what you need, over a period that ensures repayments are affordable

The key disadvantages of bad credit loans include:

  • Given the heightened ‘risk’, the APR you pay will be higher than mainstream finance
  • If you’re not careful about who you choose you may end up with an unscrupulous lender (for more information on what you should expect from your lender, read the FCA guidelines)
  • You can get trapped in a cycle of debt if you don’t pay your loans on time

Applying for loans with bad credit

As with any other type of loan online, people with bad credit may submit a short online application. The application and potential approval is generally a same day process. Below is a visual walkthrough of the process.

  • Complete our online application
  • Wait for a decision from the lender
  • If approved, sign your agreement electronically
  • Receive your funds
  • Repay your loan over the agreed period

We go to great lengths to provide a secure service, and are fully committed to the fair treatment of our customers. As a FCA authorised broker, we only work with reputable, trusted lenders, providing you with confidence and peace of mind

The main alternatives to loans for bad credit are:

Small personal loans

Personal loans have longer periods than bad credit loans, with comparatively lower interest rates. With that said however personal loan providers aren’t subjected to the same rules and price caps that high cost short term credit providers are. You may find it also harder to be accepted, depending on your circumstances.

Typically personal loans last for between 3 and 24 months. However they are often not suitable for those who fall into category of poor credit. This is because the lending criteria for personal loans is stricter, requiring a reasonable credit history.

Payday loans

Payday loans involve small amounts that are borrowed over a few months, with the balance paid off in a single instalment. Generally you can expect to pay approximately £24 interest for every £100 that you borrow, per month

Find out more about payday loans for bad credit here

If you need money deposited the same day, payday loan is might be a solution

Guarantor loans

Guarantor loans cover a broad spectrum of lending amounts and periods – from small, short loans to significant finance lasting up to five years. This form of finance requires the guarantee of a friend/family member that they will meet the loan repayments should you be unable to.

Loan approval takes into account the credit history of both the borrower and the guarantor. As such having the backing of a guarantor who’s a home owner and who has a good credit history will certainly increase the chances of loan approval.

Poor credit loan in an emergency

The MoneyAdviceService recommends that households hold three month’s salary in reserve, however it is reported that more than half of UK consumers are living on a financial knife edge, and that a single emergency may break the bank.

Poor credit loans can be an essential solution for those who face an emergency with few places left to turn. The fast turnaround of funds can be more than welcome if you’re dealing with a flooded home, heating that’s broken down or a bill that was due last month.

a poor credit loan can be a good solution in a cash emergency

Emergencies could include:

  • A past due bill
  • Payment for medical treatment
  • Covering the costs of a funeral
  • Repairing your car
  • Repairing your home (such as the roofing, electrics or plumbing)
  • Repairing a home appliance
  • Coverage for a period of delayed income

Bad credit loans with no credit check - Is this an option?

Whilst not so common, there are providers out there that offer loans with no credit check. However it’s important to note that there may be other conditions attached to such loans. This could involve an asset that is taken as security (such as your car) or the need for a guarantor.

You may also want to look out for lenders that claim to offer loans with no credit check, but that do in fact act as a broker with lenders that undertake the credit check.

Can I use bad credit loans to pay off debt?

Loans for Bad credit are usually restricted in relation to the amount that you can borrow (CashLady loans range from £80 up to £2000). They also tend to carry a high APR and interest. In circumstances where the loan you are offered carries better terms, lower interest and the repayments are manageable, they can be used to pay off more expensive smaller debts. Consolidating your debts in this way can make your outgoings easier to manage and can help you budget more effectively.

bad credit payday finance can be used for debt consolidation

Are online loans for bad credit safe?

Yes, absolutely. When used responsibly with all repayment obligations met on time, bad credit loans are safe. They can also be the first step towards repairing your credit history.

However taking out a loan that you then pay late, miss payments on or default on will only make your situation worse. For impartial advice and help, you may want to consider contacting an outside agency, such as the MoneyAdviceService or the Citizens Advice Bureau.

Apply for a a loan with CashLady

Applying for a loan with CashLady is a relatively simple process. All you need is an email address and a phone number, as well as a debit account for funds to be deposited into. If we are able to match you with a lender from our panel, you will be required to sign the loan agreement upon approval. Future repayments will be made by continuous payment authority – a system that allows direct collections by the lender from your account.

Are you eligible?

CashLady loans are open to UK residents aged 18 and over. You must be employed either full-time or part-time. Typically our applicants earn at least £2000 a month (which ensures that the loan can be repaid and further debt isn’t created). Even if you have some history of missed payments, the only way to know if you're approved is to apply. If you are declined, however, it may be best to to find finacial help elsewhere and avoid applying for multiple loans

Why choose CashLady for your loan (with or without poor credit)?

As members of the ICO, you know that your personal data is secure, and as a Credit Broker that has won awards, you can have confidence that you are making the right choice of credit broker.

Cashlady is a FCA regutaled credit broker which provide an award-winning payday loan service

Our online brokerage service is completely free of charge, and we will always provide full details as to how much you’ll repay in total, as well as the APR rate that will apply to your loan.

Our customers appreciate our focus on transparency and our commitment to them. Find us on Smart Money People &, and take a moment to read through the experiences of our many satisfied customers.

If you need to discuss your financial needs and want to find out if a short term loan is suitable for you, contact our team by phone or by using the email address below. Our customer support team are also available via our live chat service.

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Representative 1272% APR
Representative Example
Amount borrowed: £250 for 3 months
Number of repayments: 3
Interest rate p/a: 292% (fixed)
Each repayment amount: £137.21
Total amount repayable: £411.63 is a credit brokerage website owned and operated by Money Gap Limited. We are not a lender and do not provide credit to consumers. If you make an application through this site it will be shown to a selection of UK based lending partners for careful consideration. Applicants must be 18 years or over and approval is subject to status. We will never charge a fee for our service, but do receive a commission from lenders following successful introductions originating from this website. Any information we provide is for the strict purpose of illustrating the lending process only and does not constitute any form or financial or legal advice.

Money Gap Limited is a company registered in England and Wales with company number 6617413.
Registered Office: 89 New Bond Street, London W1S 1DA. Correspondence address: 14 Grays Inn Rd, London WC1X 8HN. Authorised and regulated by the Financial Conduct Authority. You can find us on the FCA Register with Reference number 726151. Data Protection Registration Number Z1696368. is a trademark and trading name of Money Gap Limited. Copyright ©2018 Money Gap Limited. All Rights Reserved.