What are Small Loans for Bad Credit Borrowers?

You can spend a lifetime building a strong credit rating. That’s not hyperbole. From the day you get your first childhood savings account you are starting to build your personal credit history. From that moment on every major and minor spending decision you make has some impact your score. For every utility bill you pay on time your credit rating goes up a point or two. Every loan you pay off in full gives you another boost. Even keeping up with your telly subscription services can help to build good credit.

However, maintaining a strong credit rating is not quite as easy as it sounds. And it doesn’t take much to lose points on your score. A late payment here. An overdraft there. That’s really all it takes for your credit rating to slip. When that happens it can be hard to regain lost ground, and even harder to qualify for an urgent loan. What, then, can you do when your credit rating is less than perfect and you need to borrow money in a hurry?

A small loan for borrowers with bad credit may well be the answer.

What Do We Mean by Small Loans for Bad Credit?

Small Loans for people with poor credit fill an important need in the lending industry. They address the needs of average people facing common financial shortfalls. These instant loans are generally restricted to less than £1000 and are meant to provide the funding you need to cover an immediate unexpected expense.

Traditional loans allow borrowers to make long-term investments. They provide the buying power people need to make large purchases such as homes and cars. Small short-term loans give people with poor credit the buying power they need to handle little everyday emergencies. Small bad credit loans are typically used to cover home and car repairs, sudden medical bills, or moving costs.

One of the primary features of small loans is that they are designed to be repaid as quickly as possible. These are not long-term lending products. Repayment periods are brief and highly structured, and the total cost of the loan is expected to be repaid within weeks or months.

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).

Small Loans and Bad Credit Lenders

Traditional lenders rely heavily on the applicant’s credit history. That’s understandable. They are typically underwriting large loans with long-term repayment schedules. Naturally, lenders will want to know that their client has a proven history of paying bills on time and discharging their loans in full.

Bad credit lenders specialise in delivering small loans to people with adverse credit histories. Because the sums involved are smaller, and the repayment periods are short, they are often more flexible when it comes to approving applicants.

At Bad Credit Loans we look beyond your credit score. We consider your employment status, pay rates, and your incomings and outgoings to determine your eligibility for any small bad credit loans.

What is Considered a Bad Credit Rating?

A borrower’s credit score is used to determine their overall creditworthiness. It is a record of an individual’s fiscal history, warts and all. In the UK lenders refer to three credit rating agencies – Equifax, Experian and TransUnion. Each agency uses their own numerical rating system. High scores indicate strong credit profiles, while lower scores represent adverse credit histories.

Over time certain factors can damage a person’s credit rating. The most common factors include:

  • A history of late or missed payments
  • Exceeding credit limits
  • Defaulting on a loan
  • Bankruptcies and County Court Judgements
  • Frequent credit card cash advances
  • Excessive applications for credit over a short period of time

Even something as simple not being on the electoral rolls or moving house too often can adversely impact your credit rating. Young people with little or no credit histories to speak can also find themselves classed as high risk borrowers. The same holds to true for people who have recently moved to the UK, as credit histories from other countries aren’t transferrable.

How Does a Bad Credit Rating Impact Your Loan?

Borrowers with less than stellar credit histories are considered high risk customers. Whether the cause of your adverse credit report is a series of missed payments or simply a lack of past credit your score will dictate the kind of loans that are available to you. It will also dictate the terms and the overall cost of those loans.

Borrowers with bad credit can typically expect their loans to feature relatively high interest rates. The loans also generally have highly structured repayment schedules and as well as penalties for late or missed payments. Before accepting a bad credit small loan you should consider the total cost of that loan.

For example:

  • Affordability – Bad credit lenders approve small loans based on the borrower’s income and employment status. As the debtor, you will be responsible for the amount of cash you borrow as well as all attendant fees and interest. Carefully consider your current income stream, as well as any other recurring debts, to ensure that you can afford the total cost of the loan being offered.
  • Interest Rates – Interest rates are set according to the perceived risk of the borrower. If you are struggling with poor credit even a small loan may feature a high interest rate. Make sure you understand how that interest rate effects the total cost of your loan.
  • Repayment – Even small loans must be repaid on time and in full. Late payments are not an option. Before agreeing to any bad credit loan be sure you understand the repayment plan so you can budget accordingly.

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

Can You Qualify for a Bad Credit Small Loan?

At Bad Credit Loans we keep our application process simple. Everything is typically handled online, with most borrowers receiving a judgement within hours of their application. In order to qualify for any loan borrowers must meet certain requirements:

  • All applicants must be at least 18 years of age
  • Applicants must be a valid UK resident
  • Applicants must be able to show proof of residence
  • Applicants must be actively employed and must meet specific income requirements
  • Applicants must have an active UK bank account
  • Applicants should also be able to supply a valid e-mail address as well as other contact information

In many cases, people applying for small bad credit loans need their cash in a hurry. It is sometimes necessary to follow up with customers to confirm data included in their application. To speed up the loan approval process it is always advisable that you keep yourself available to answer further questions until you loan application has been finalised.

Applicants who have been approved for a bad credit small loan can typically access the funds in as little as one business day. Cash will be directly deposited into your active UK bank account.

Repairing Your Credit Rating

A poor credit score can happen to anyone. The important thing is how you handle your credit history going forward. Small bad credit loans can actually help you to rebuild your credit rating. When you take out a small loan, even from a so-called bad credit lender, you have an opportunity to demonstrate your creditworthiness. When you repay that loan on time and in full it will count in your fave and will be reflected as a boost in your overall credit rating.

If you would like to learn more about managing your finances as well as rehabilitation of your credit history you can obtain advice and counselling from the National Debt Line and Step Change. These services are free to all UK residents interested in learning to better manage their personal finances.

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).