Good loan companies for bad credit loans are always authorised and regulated by the Financial Conduct Authority (FCA).
If you have a poor credit history it can be difficult to find a lender willing to give you a loan. Many high street banks will not lend to those with bad credit.
There are loan providers out there who offer cash loans to those with a poor credit history.
Many short-term lenders and payday lenders will provide loans to people with bad credit.
CashLady takes a look at some reputable loan providers for bad credit customers who are looking for cash loans.
Where does the information about my credit history come from?
When a loan provider is looking at giving you a cash loan they will take into account different information to give you a credit score including:
- Any information the lender already has about you, such as a previous loan you have with them
- Information you include on your application form for a short term or payday loan
- Your credit report from a credit reference agency
This score will then tell them how much they can lend you and what your loan’s interest rate will be.
How can I check my credit score?
There are three credit agencies – Equifax, Experian and CallCredit. Different loan providers use different agencies.
Will I have to undergo credit approval to get a short term loan?
Most short term lenders and payday lenders will require some kind of credit approval in order to approve you for your loan. But it is a myth that you cannot get credit if you have a poor credit history.
There are reputable bad credit lenders out there who could lend you money.
Contrary to popular belief, you do not have one credit score. Each lender will look at your details and then score you using their own calculations. This means that you may be more likely to get a loan with some loan providers over other loan providers.
What is the difference between payday lenders and short-term lenders?
Payday lenders offer payday loans. These type of loans are used for people who need the money to ‘bridge the gap’ between one payday and the next. Strictly speaking, a payday loan should last no longer than one month.
Short-term lenders offer short-term loans. Short-term loans usually last from three months to six months.
Many loan providers are payday lenders and short-term lenders. Because they choose to offer their customers both types of loans.
Good loan companies for bad credit
Wonga offers short-term loans and payday loans to its customers. Also, Wonga’s maximum loan term is 3 months.
Wonga offers payday loans of up to £400 with a maximum term of 35 days. Their 3 months ‘Flexi loan’ product goes up to a maximum of £500. Existing Wonga customers can borrow up to £1,500 through their ‘Flexi loan’ product.
To apply for a loan with Wonga you must be:
- over 18 years old
- a bank account and debit card holder
- a mobile phone owner
- living in the UK.
Wonga are FCA regulated and authorised.
Wageday Advance was one of the UK’s first payday lenders.
Furthermore, Wageday customers can borrow from £80 upwards. If you are a new Wageday Advance customer you can borrow up to £500. Existing Wageday Advance customers are able to borrow a maximum of £1,000.
Strictly speaking, Wageday Advance is a short term lender. They offer you the ability to choose a loan term of between 1 and 6 months.
If you want to apply for a loan with Wageday Advance you must be:
- in permanent employment
- at least 18 years old
- a UK resident
- have a bank account and a debit card.
Wageday Advance is FCA regulated and authorised.
Short-term lenders, Lending Stream, allow new customers to borrow up to £1,500 for emergency expenses such as car repairs.
They give their customers 6 months to pay back their loan.
In order to apply for a cash loan with Lending Stream you must:
- live as a UK resident
- be at least 18 years old
- be in regular employment
- have a minimum monthly income of £400 and
- have a debit card and bank account.
Lending stream is authorised by the FCA.
If you are a new Quick Quid customer you can borrow up to £1,000. If you are an existing customer, you
can borrow up to £1,500.
You can take out a loan for a period of 1, 2 or 3 months.
If you want to apply for a loan with Quick Quid, you will need to:
- have stable employment
- be a UK resident
- be aged 18 or over
- have a valid UK bank account.
Quick Quid is FCA regulated.
Sunny offers payday loans, short-term loans and larger loans for longer terms.
Short-term loans range from between £100 and £950. These are usually offered for a 6-month term and are known as ‘sunny now’ loans.
Longer term loans range from between £1,000 and £2,500. If you are taking out a longer term loan you can pay it back over 14 months. These are known as ‘sunny plus’ loans.
Sunny’s eligibility criteria say that you must:
- be at least 18 years old
- be a UK resident
- have a UK bank account and debit card
- have a net income of £500 or more per month
- own a mobile phone
Sunny is FCA regulated.
Satsuma offers their customers the option to pay back their loans weekly or monthly.
They lend up to £1,000 for new customers. Existing customers can borrow up to double that amount. The minimum loan amount they offer is £100.
To apply for a Satsuma loan you must:
- be aged between 18 and 74
- be a UK resident
- not be bankrupt
- have an email address and mobile number
- have a bank account and debit card
Satsuma is FCA regulated.
As of November 2017 PaydayUK loans are referring customers to The Money Shop high street shops. This means their loans may not be available online anymore. PaydayUK used to be one of the largest and longest established UK payday lenders.
Should I get a bad credit loan?
It is important to make sure you look at all the options before you take out a bad credit loan. This is because the interest can be higher than other forms of personal loan meaning that you could end up paying more.
You must also be comfortable that you can make the repayments.
I have been accepted for a short term loan but it has a higher APR than I originally saw advertised
Loan providers have to give at least 51% of their customers the APR that they advertised.
You are not guaranteed to get the advertised APR when you apply for a loan.
Having a poor credit history is one of the factors that loan providers take into account when deciding on your APR.
Why do I need to pick loan providers that are FCA regulated?
The FCA regulates payday lenders and short-term loan lenders operating in the UK.
By using a loan provider that is FCA regulated you will know that they are adhering to the FCA’s restrictions. These include caps on payday lending charges and rollover restrictions.
If you want to check if a loan provider is FCA regulated, you can search for them on the FCA register.
Can I apply to different loan providers on one internet site?
Yes. In fact, this is a good idea as it will allow you to apply to a panel of lenders rather than just one. This could increase your chance of being approved for a loan.
CashLady only uses a trusted panel of loan providers who are FCA regulated and authorised.
When you apply with CashLady you will get a selection of responses. This saves you time by potentially reducing the need to ‘shop around’.
Just because you have a poor credit history it does not mean that you cannot get a loan.
There are many good loan companies for bad credit in the marketplace.
This article just looks at a few of them.
They all offer varying loan amounts and terms.
The APR that loan providers advertise may not be the APR that you get. Lenders only have to give the advertised APR to 51% of their customers.
All loans are subject to credit approval. This means loan providers will check your credit history. As well as, give you a credit score that they use to make their decision about whether to approve you for a loan.
Not all payday lenders use the same scoring technique. This means that you may be more likely to get accepted with one loan provider over another.
Having a bad credit rating does not necessarily mean that you will never be able to get credit again. However, it is important to think about why you need the loan and whether you will be able to afford to pay it back.