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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.

Bad credit loans are an essential financial lifeline when these forgotten consumers face an emergency. Designed for those who have an adverse credit rating, they provide fast funds that are often available the same day.

Discover your bad credit loan options with CashLady - Apply here

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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

A bad credit score can be caused due to one or more of the following reasons:

  • 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 as.

What is a bad credit loan?

Bad credit usually appears when you have an outstanding debt with a loan provider
For those impacted by a bad credit record, finding a lender who’s willing to consider lending can be a struggle. For these consumers bad 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 lends amounts of between £80 to £2000 for between 3 and 6 months.

If you want to know more what bad credit loans are, this article may shed some light on it.

Bad credit loans UK

The market for bad credit loans 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.
Bad credit loan users in the UK by year Money lent
2009 1.2 million £1.2 billion
2012 4.1 million £2.2 billion

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 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 left on your credit file

Bad credit loans - 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

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 Bad credit loans

Bad credit loans 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 a bad credit loan is to consider and choose another form of finance. For future reference, you may want to read our guide on avoiding getting into debt.

Online Loans for bad credit - how does it work?

Bad credit loans are almost universally 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 bad credit loan

The advantages of a bad credit loan

The main advantages of bad credit loans include:

  • Access to finance for those with a less than perfect credit record
  • Quick approval
  • Fast access to funds
  • 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 a Bad credit loan

Bad credit loan applications are normally completed quickly and have a short online application. The application and approval is generally received the same day (and in the case of CashLady, takes 5 minutes from beginning to end). Below is a visual walkthrough of the process.

  • Complete our online application
  • Wait for approval
  • Sign your application using the ‘e-signature’ tool
  • Receive your funds

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

Alternatives to bad credit loans

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 bad credit loans are. This could result in you paying more than double the original amount borrowed.

Typically personal loans last for between 3 and 24 months. However they are often not suitable for those who fall into category of bad credit applicants. 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 the course of one month, with the balance paid off in a single instalment. Generally you can expect to pay approximately £24 interest for every £100 that you borrow.

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.

Bad 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.

Bad 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). However they can be used to pay off numerous 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 bad credit loans 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 bad credit 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 bad credit loan with CashLady

Applying for a bad credit loan with CashLady is a simple 2-step, 5 minute process. All you need is an email address and a phone number, as well as a debit account for funds to be deposited into. Once matched with a lender, 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).

Why choose CashLady for your loan?

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 bad credit 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.

cashlady alternative to bad credit payday loans

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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
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Bad Credit Information
How do bad credit loans work in the UK
What are loans for bad credit?
Bad Credit Loans - What are the options?
Types of UK bad credit loans
How to get loans for bad credit
How to judge the safety of bad credit loans
How to avoid bad credit loans
How to apply for bad credit loans through a broker
What are the alternatives to bad credit loans

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