Personal Loans for Borrowers with Poor Credit

Sometimes it can be difficult to effectively budget for the future. While many expenses are predictable, others tend to arrive without warning. Some financial shortfalls are fairly easy to handle and can be covered by simply dipping into your savings. Others, however, can put a greater strain on your finances.

When you hit a spending impasse and your nest egg falls short of the mark you may find yourself in need of a small personal loan. But if you have an adverse credit history applying for that loan, and actually securing the funding you need, can be easier said than done.

But a poor credit score shouldn’t be a barrier to accessing the money you need when you need it. Even if your credit history is less than impressive you can still access to the quick cash you need to cover any unexpected expenses.

What are Poor Credit Personal Loans?

Bad credit loans, sometimes called poor credit loans, are designed to pick up where traditional lending leaves off. They provide urgent funding for people who might be unable to secure their loan through a conventional lender due to a troubled credit history.

Personal loans for bad credit borrowers typically involve more modest sums than conventional lending products. They also tend to come with more restrictive repayment terms. These loans won’t pay off your mortgage or buy you a new car, but they can provide a few thousand pounds to help with home and car repairs, school tuition fees, or the costs associated with moving house.

How Your Credit Score Affects Your Borrowing Options

Your credit rating is, in essence, a distillation of your financial history. It reflects your past spending patterns and credit use. Loans, credit card purchases, and utility bills all combine to create a snapshot of your creditworthiness. Even something as seemingly unimportant as an online subscription service impacts your credit history.

Lenders rely on a loan applicant’s credit rating to determine their risk as a potential borrower. The lower the score the higher the risk, with high risk borrowers often finding it harder to qualify for traditional loans.
A bad credit rating is usually the result of some, or all, of the following factors:

  • History of missed or late payments
  • Defaulting on previous loans or debts
  • History of overdrafts
  • Past court judgements or bankruptcies

Traditional lenders rely heavily on credit scores to determine a borrower’s creditworthiness. Alternative lenders look beyond your credit score, looking at your current income and debt profiles. This gives bad credit lenders more flexibility in the approval process, making it possible for customers with bad credit to secure the personal loan they need when faced with a financial shortfall.

What Types of Personal Loans are Available?

When it comes to personal loans for bad credit borrowers there are a couple of basic lending options available:

  • Secured Loans – A secured loan requires the borrower to pledge certain personal assets to be used as a security for the proposed loan amount. Secured loans can often be easier to obtain because the collateral involved helps to lessen any perceived risks to the lender. They can also help the borrower to qualify for a lower interest rate and a less restrictive repayment schedule. It is important to note, however, that a secured loan places any collateral in peril. If you fail top discharge the loan completely, and according to the agreed terms, the lender has the right to seize any assets being used as collateral to secure the loan.
  • Unsecured Loans – An unsecured loan requires no collateral to be pledged by the borrower to guarantee the loan. Bad credit borrowers rarely qualify for unsecured loans. The risk is typically perceived as to great to the lender. In certain circumstances, an unsecured personal loan may be available to bad credit borrowers, but customers should be prepared to accept higher interest rates and more stringent repayment terms.
  • Guarantor Loans – Guarantor loans for bad credit borrowers do not require any assets be pledged to secure the loan. However, lenders will require a co-signer to the loan agreement. Typically the co-signer, or guarantor, will be a family member, work colleague, or friend. The co-signer assumes all responsibility for the loan if the borrower defaults. In other words, if you fail to repay the loan your co-signer is on the hook for the full amount plus and fees and charges.

How much would you like to borrow?

Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum loan length is 1 month. Maximum loan length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).

The Pros and Cons of Bad Credit Loans

There are pros and cons to all lending products. Personal loans for bad credit are no different. The advantages are clear. You receive the cash you need when you need it, often deposited directly into your bank account. You are then able to address your spending emergency without any undue delays.

Bad credit loans also give you the opportunity to improve your credit rating. Repaying your loan on time and in full demonstrates your ability to successfully manage your finances. Successfully discharging your loan will add positive points to your credit score, helping to build a positive credit history.

There are, however, some definite disadvantages to bad credit personal loans. The loans are typically more expensive than those secured through conventional lenders. As a ‘high risk’ borrower you should expect any loan you receive to include higher interest rates as well as processing fees that will add to the total cost of your loan. You should also understand that these are short-term loans, and as such the repayment terms will be highly structured and relatively brief. There won’t be much in the way of wiggle room when it comes to discharging your loan.

Applying for a Poor Credit Personal Loan

At Bad Credit Loans we keep the application process as simple as possible. All you need to do is fill in the online form stating the amount of money you wish to borrow. We will also need to collect some basic financial information in order to process your loan request.

To qualify for a loan applicants must meet the following requirements:

  • All applicants must be at least 18 years of age
  • All applicants must be a valid UK resident
  • All applicants must show proof of current employment
  • All applicants must have an active UK banking account
  • All applicants must supply a valid e-mail address as well as other current contact information

In order to qualify for a personal loan you will need to meet certain income requirements. In addition to your credit report lenders will consider your employment status, current income and pay schedule, and the total amount of debt you are holding. You may be asked to supply additional information before a final determination is made, so it is important to keep yourself available until the application process is completed.

Why Use Us

  • PCAW Approved
  • £100 - £5,000
  • Instant Transfer
  • Same Day Cash
  • Direct Lenders
  • Flexible Terms
  • Reputable Lenders
  • No Guarantor
  • 1 - 36 Months
  • 98% Approved
  • Fast Application
  • No Paperwork
  • UK Service
  • 24/7 Support
  • Quick Decision
  • Bad Credit OK
  • Easy Repayments
  • No Hidden Fees

Financial Planning and Restoring Your Credit Rating

Personal short-term loans can help provide the financial flexibility bad credit borrowers often lack. In addition to delivering the funds you need when you need them your loan can help you rehabilitate your credit history. Remember, smart loan management is one of the keys to a better credit score. Make your payments on time and discharge your debt completely and you will see your credit rating climb.

If you would like to access valuable advice and counselling regarding money management and improving your credit rating you can tap into the following UK government services:

Apply Now

Simply select how much you'd like to borrow and for how long:

Representative Example: Rates from 49.9% APR to max 1333% APR. Minimum loan length is 1 month. Maximum loan length is 36 months. Representative Example: £250 borrowed for 30 days. Total amount repayable is £310.00. Interest charged is £60.00, annual interest rate of 292% (fixed). Representative 669.35% APR (variable).