⏱Last Updated on
There are many different places to begin your search, including online and on your local high street.
Where you start depends on which type of loan suits you best.
Finding bad credit loans
Online short term loans
Most people turn to payday loans when they need a little extra money.
Usually, they apply for short-term finance. Occasionally, they apply for medium-term loans to get larger amounts of cash.
It is easy to find online loans.
A simple Google search is all it takes.
Choosing a lender
If you search for where to get bad credit loans, you may be overwhelmed by the number of results.
There are many lenders, all offering their own take on a well-known lending product.
You may decide that you want to go with a big name.
Some of the most popular providers of online loans are Wonga, QuickQuid and Pounds to Pocket.
Alternatively, you could choose one of the many new lenders.
Most lenders follow the same structure. Borrowers choose their loan amount, repayment term, apply and receive a decision.
Repayments are usually taken using Continuous Payment Authority, on pre-agreed dates.
Some lenders are using technology to change online loans and improve the experience. SafetyNet Credit is one such lender.
If a lender links to your bank account, they may be able to make a lending decision that is influenced less by your credit score.
Your income and outgoings can be taken into account.
They can also act quickly to offer help if it seems that you are struggling financially.
If you are applying for credit online, the decision cannot be made using lender name alone. One loan product may meet your needs much better than another.
Take some time to check the terms of each loan, the total cost and any unique selling points.
Using a broker or comparison site
When you are applying for online loans, it is best not to ask for too many quotes. Quotes and multiple loan applications may adversely affect your credit file.
You might also find it difficult to compare lenders on your own. Each will have their own lending criteria. Though most seem similar, their differences should impact your decision.
To make it easier to compare online loans, you can use a broker comparison website who use a panel of lenders.
One application is sent to many lenders. Each can make a preliminary decision. You will then be shown the results of your application.
Using a loan broker service means that you have a higher chance of a positive response from one or more lenders.
High street lenders
You will need to provide identification. But, this method can sometimes be quicker than waiting for an online decision.
High street lenders allow you to approach a human being to ask about borrowing money. You have a chance to describe your circumstances.
Decisions made by a computer, use specific rules. By visiting a high street lender, you may be able to discuss your options. You will see what loans might be suitable before you spend time on an application.
Doorstep lenders, like Provident Personal Credit, are another option.
With online loans, the cash is transferred to your bank account. With doorstep loans, the money is delivered to your door.
Agents visit your house, usually once a week, to collect your loan repayments.
Doorstep loans may be the best option if you do not have a valid UK bank account.
As long as you are careful, you do not need to be concerned about these loans being any less safe than ones that are managed online. However, some doorstep lenders are loan sharks.
If you are borrowing from a doorstep lender, you can start the application online with a trusted loan provider. Someone will visit your house to complete the process.
Do not be tempted to sign up with a lender that shows without warning.
You should also check that you have been given paperwork when agreeing to your loan. It is important to have details of the total loan cost and the value and date of each repayment.
If something does not feel right, delay your decision and do your research.
Loan sharks can harass and threaten if you do not make regular payments. It is important to protect yourself from them.
Secured loans may be suitable for borrowers that want lower interest rates, despite a poor credit score.
Quick, same day loans for people with a far from perfect credit history are often expensive because of the risk involved for the lender. A secured loan reduces lender risk, by giving them another way to get back the money that you owe.
Many secured loans are cheaper than unsecured loans. But, they come with a bigger risk. Whatever you use as security, you must be prepared to lose.
With these, your car acts as security for your loan. Ownership may be transferred to the lender if you cannot keep up with repayments.
You will usually retain use of your car for the duration of your loan. You do not need to exchange your vehicle for the money.
As long as you keep up with your loan instalments, the car remains yours once the debt is cleared. If you cannot afford to repay your loan then your vehicle may be repossessed.
To apply for a logbook loan, you should be the sole owner of the vehicle and have no outstanding credit attached to it.
These secured loans are available online and on the high street. They provide cash loans in exchange for belongings such as jewellery, antiques and other high-value items.
Pawnbrokers can accept anything as collateral for a loan, though they usually stick to a limited selection of items. Some will accept appliances, electricals and gadgets alongside more traditional items.
You may also have several independent pawnbrokers in your town or city.
Online pawnbrokers are becoming increasingly popular. You will need to send off your item before you receive the cash. This is a slower option and comes with a risk if you do not use a trusted and authorised lender.
If you are using an online pawnbroker, be sure that you are not sending your belongings away to scammers that will take them and run. Also bear in mind that, even with an authorised lender, there can be a risk of items being lost in transit.
One of the benefits of using a pawnbroker is the higher chance of approval. The lenders should be happy to approve your loan because they receive something of value in return.
However, you should only choose a pawnbroking option if you fully understand the risks. Ultimately your loan is secured against an asset and if you do not pay your loan back, you may run the risk of losing this possession.
Guarantor loans can be a great option for people with poor credit scores as the loan decision is based on another person’s credit worthiness.
You can easily apply for guarantor loans online.
One of the most well-known lenders is Amigo. But there are more Guarantor loan providers to choose from.
To apply for a guarantor loan, you will need to know someone that is happy to act as guarantor. They will be responsible for making your repayments if you fall behind for any reason.
Guarantor loans may be cheaper than other online loans because the lender has a higher chance of getting their money back. But, they can put a strain on relationships.
You will need to know a suitable person, before applying for a guarantor loan. As well as being happy to back your loan, they will need a good credit score of their own.
Many lenders require guarantors to be homeowners.
Amigo may give out loans when a guarantor has a very high credit score but ideally requires that they are UK homeowners.
With a guarantor loan, your credit score becomes less relevant. You may be able to get a loan even with a poor credit rating.
Finding where to get bad credit loans is not as easy as it seems.
There are many options. It can take some time to compare your choices, to see which is right for your circumstances.
Whichever you choose, you can protect yourself by searching the Financial Services Register. This online register lists approved and regulated lenders, to help you to avoid being caught out by a scam.
If you have a bad credit rating and need money in an emergency, you are a prime target for people that prey on the vulnerable.
You are in a category more likely to agree to a loan without reading through the terms. Or, to act impulsively without thinking about the consequences.
Checking the Financial Services Register takes only a minute or two. Yet, it is one of the easiest ways to ensure that you are borrowing from a genuine lender.
No credit checks loans
Lenders have a responsibility to check that you can afford loan repayments. Though their methods are not always perfect, they should do everything in their power to make sure that this is the case.
Steer clear of websites that offer loans without a credit check. These put you at a high risk of being a loan shark victim or caught up in a debt spiral.
Credit checks might seem like the enemy when you have a low credit score, but they are in place for your protection.