Compare Bad Credit Loans
Compare our range of bad credit loans from UK lenders and check your eligibility* without impacting your credit score
- Must be a permanent resident of the UK for at least 12 months (Not IOM or Channel Islands)
- Must be aged 20 or over (at start of the loan)
- Must have a current bank or building society account
- No current bankruptcies, CCJ's, or active IVAs
- Must not be unemployed
- Must be aged 18 years or over
- Must be a UK resident
- Interest rates are dependent on your individual credit score
- Must be a homeowner
- Must be aged 21 or over at the start of the loan
- Must be a UK resident (excluding the Channel Islands and Isle of Man)
- Must have a current bank account or building society account
- Must be in permanent paid employment
- Must not be currently bankrupt or in an IVA or debt management arrangement
- You must be 18 years of age or older
- You must be employed
- There is a membership fee of £10 per month
- Must be aged 21-75
- Must be a UK resident
- Must not be on an active bankruptcy, IVA or equivalent
- Must be a UK resident
- Must be aged between 18 and 70 (at start of the loan)
- Must have UK Bank Account and Debit Card
- Monthly net income of more than £700
- Must be employed or Self Employed
- Must be aged 21 years or over
- Must earn at least £1,300 per month
- You can apply for one month of income
- CCJs and defaults not accepted
- Be aged between 18 - 72 (at time of application)
- Must be a UK resident (exlcuding the Channel Islands and Isle of Man)
- Have a net monthly income of £600+
- Must not be unemployed, a full time student or on benefits
- Must not be currently bankrupt or in an IVA
- No CCJs or defaults in last 12 months
- Must live in the UK (excluding the Channel Islands and Isle of Man)
- Must be aged 18 or over at start of loan
- No bankruptcies within last 12 months
- Must have a UK Bank Account and Debit Card
- Can be Tenant or Homeowner
- Must be Employed or Self Employed
- Must be aged 18 or over
- Must be employed in public service
- Must have been employed with the same organisation for 3 months+
- Must have earned £1,100+ from your employer every month for the last three months
- Must be paid monthly, rather than weekly
- Must have an online banking account
- Must be permanent UK Resident for at least 12 months (Not IOM or Channel Islands)
- Must be aged 18 or over (at start of the loan)
- Must have a current Bank or Building Society Account
- No current bankruptcies, CCJ's or IVAs
- Must not be unemployed
If you are thinking of consolidating existing borrowing you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
Our service is free of charge but we receive commissions from the providers we refer you to. This table is initially ordered by representative APR. You can use the options above the table to order it according to various criteria. You may be offered different rates depending on your personal credit rating.
Our comparison service features a selection of providers from whom we receive commission.
Freedom Finance is a trading style of Freedom Finance Limited who are authorised and regulated by the Financial Conduct Authority. Freedom Finance Limited. Registered Office. Atlantic House, Atlas Business Park, Simonsway, Manchester, M22 5PR. Registered in England & Wales 06297533. FCA No. 662079. VAT Registration Number 257 0001 44.
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What is a bad credit loan?
Bad credit loans are meant for people who have a poor credit score due either to past money troubles or limited credit history.
You can use bad credit loans for many different reasons, such as car repairs, or to consolidate your debts into one single repayment, which can make it easier to repay them and keep track. Some people take out a bad credit loan to try to improve their credit score by showing they can manage debt.
Taking out a loan when you already have a poor credit rating isn’t an easy decision to make. Anyone who has struggled with debt problems in the past will be aware of how easy it is for debt to pile up and get out of control. However, sometimes the right loan can help people in such circumstances, providing it is affordable for the borrower.
How to get a loan with bad credit
Before you think about getting a loan, you should work out a budget so you know how much you can afford to borrow and repay each month. This will help you when you start looking at different loans as you can find one that best meets your requirements and circumstances.
You may also want to check your credit score to see if there are any easy ways to improve it, as a better credit score will help you to get a more competitive loan.
You can check your eligibility for a loan and receive quotes using the tool above. You can also browse through the options on our comparison table to find out the representative APR of each provider, how much you can borrow, and the loan terms on offer. You can also see more details about their eligibility criteria.
You should only apply for a loan if you are confident of being accepted, as loan applications will appear on your credit history and could affect your score.
When you apply, lenders will ask for proof of personal details including your name, address, age, employment status, income, and more.
What are the advantages of a loan for bad credit?
Some of the advantages of a bad credit loan are:
- You can borrow a lump sum of money to use for many different purposes.
- As long as you repay the loan in full and on time, you’ll improve your credit score.
- If you have bad credit, you’re more likely to be accepted for one of these loans than a standard personal loan.
What are the disadvantages of a loan for bad credit?
However, you need to consider some of the downsides of getting a bad credit loan, including:
- These loans typically come with higher interest rates.
- You may not be able to borrow as much as someone with a good credit score.
- Your loan options are more limited as not all providers offer bad credit loans.
Types of bad credit loans
Bad credit loans come in various forms. It’s worth spending some time researching these different loan options to make sure you choose the right one for your situation.
There are various lenders that will consider offering a personal loan to people with bad credit histories. These are unsecured loans, which will often come with higher interest rates than loans that offer some form of security. To qualify for an unsecured loan, you will have to meet other eligibility criteria, such as having a steady reliable income, and be able to afford the repayments.
Although secured loan providers tend to offer larger sums of money over a long period of time, they are often less strict about borrowers’ credit ratings as the loan is secured against a property or other high-value asset, such as a car. If the borrower fails to repay, the lender has the option to force the sale of the property or goods to get back the money they’re owed, so there is less risk to the lender. This means interest rates can be lower than on an unsecured loan.
For borrowers, however, there is a risk that you could lose your home, so it’s vital that you are confident you can meet the repayment responsibilities before committing to a secured bad credit loan.
Guarantor loans are a popular, unsecured method to obtain a loan despite having a poor credit history. If you have a close family member or friend who is financially stable and has a good credit score, they can opt to act as a guarantor for your loan. Although you are the borrower, your guarantor agrees to cover the cost of the repayments if you are unable to.
Peer-to-peer loans are offered by private investors rather than traditional lenders. Some peer-to-peer loan options may be available to borrowers with a poor credit score, but interest rates will usually be high and other lending criteria will apply.
Debt consolidation loans
By merging different loans into a single loan, you can simplify your repayments with a bad credit consolidation loan. These loans come with a single level of interest from one lender, as opposed to maintaining multiple rates from multiple lenders on different debts. However, bear in mind that consolidating your debts may mean you pay more in interest overall. Debt consolidation loans can be secured or unsecured.
Applying for a bad credit loan
Before applying for a bad credit loan, you’ll want to think carefully about whether this type of loan is the best option for you. To ensure you choose the right kind of loan, ask yourself:
- Are there cheaper alternatives available to me, such as a bank overdraft or the option of borrowing from a family member?
- Will I be able to borrow enough?
- Can I afford the repayments over the entire term of the loan?
- Can I repay early without incurring charges?
- What is the loan APR?
- If you decide that applying for a bad credit loan is right for you, use our comparison table to see what deals are on offer and check your eligibility.
Loans for Bad Credit FAQs
Where can I get a loan with bad credit?
You can use our comparison table above to find bad credit loan options that might be right for you.
There are various lenders that will consider lending money to people with bad credit histories, including specialist online lenders and credit unions. Each lender will have their own set of eligibility criteria so you should check to see if you meet their requirements, or if you need to improve your credit score first. These loans will usually have a higher rate of interest than those for borrowers with good credit history.
Are direct lender loans available for very bad credit?
Yes, you may be able to find direct lenders that offer bad credit loans. However, it’s always worth looking at a number of different providers, as well as using our comparison table, to make sure you choose the most suitable option with the lowest interest rate.
What are the best loans for bad credit?
The best bad credit loans will have monthly repayments you can comfortably afford and help you meet your goal. Before applying for a bad credit loan, check the annual percentage rate, also known as APR, as well as the available loan amount, length of loan terms, and the monthly repayment you’ll have to pay.
Can I get a personal loan with bad credit?
There are some lenders who will consider lending money to people with bad credit histories. Whether you can get a personal loan with your credit history will depend on other factors, such as your income and the criteria of the lender. Most providers will allow you to check your eligibility for a loan before applying.
How do I get a bad credit loan?
The application process for a bad credit loan is often similar to applying for any other loan. You will usually be asked to provide identification with your name and address history, alongside information about your employment status and financial situation. The lender will run a credit check as a part of the application process.
Can I use a bad credit loan to pay off debt?
Yes, you will usually be able to use a bad credit loan to repay other outstanding debts. In fact, some bad credit loan providers will only lend for this purpose. You should think very carefully about consolidating debts in this manner as you may end up paying more overall. In addition to this it’s also possible that you are securing previously unsecured debts against your home or other asset.
Can I get a bad credit loan for a car?
Perhaps. You may be able to get a bad credit personal loan and use it to buy a car. Alternatively, you may be able to take out a car finance agreement, where the lender owns the vehicle while you repay the loan. Find out more about your car finance options with bad credit. Ultimately the decision of whether to accept or reject your application and what a loan can be used for lies with the lender so always check their individual eligibility criteria.
Can I get a bad credit loan without a guarantor?
As detailed above, there are different types of bad credit loans, only one of which is a guarantor loan. The other types of bad credit loans often either charge high interest rates to offset the risk of lending or ask for security, such as a car or a property, in exchange for the loan.
Are bad credit loans risky?
It can be risky to take out a bad credit loan if you’re unsure if you will be able to repay the loan as agreed. If you run into financial trouble while you still have an outstanding balance on a bad credit loan, interest charges and penalties can mount up quickly. You could also then see your credit rating suffer further, or you could lose your home or car.
Can I get a business loan with bad credit?
If you have a limited company, lenders will use your business credit score to decide whether to offer you a loan. Some lenders will consider lending to businesses with poor credit ratings, but they may want some security or ask for a personal guarantee, which is when you agree to repay the loan if your business can’t.
If you’re a sole trader, lenders will look at your personal credit score. It is possible to get a business loan with poor credit, but this will depend on the lender and your circumstances.
Can I qualify for a mortgage with bad credit?
If you want to buy a home and you have bad credit, you may still be able to get a mortgage. However, you are likely to face higher interest rates and you may need to put down a larger deposit, so it may be worth waiting until you can improve your credit score. Make sure you can afford the monthly repayments before applying for a mortgage with bad credit.
Can I get a long-term loan for bad credit?
There are long-term bad credit loans with terms of up to seven years available, although whether you are eligible depends on your individual situation and the lender. Bear in mind that the longer the loan term, the more you would need to pay in interest overall. Secured loans will typically offer longer repayment terms than unsecured loans.
Can I still apply for a loan with very bad credit?
Yes, you can apply for a loan even if you have very bad credit. However, not all lenders will be able to offer you a loan, so make sure you check whether you qualify before applying.
What is bad credit?
If you have bad credit, it means credit reference agencies (CRA) view your credit history more negatively. Having bad credit means you may have made late payments, missed payments, or defaulted on credit in the past, and you may also have an individual voluntary agreement (IVA), a debt relief order (DRO), or a county court judgment (CCJ).
Different CRAs have different scoring systems, so there is no single figure to indicate you have bad credit. Equifax judges someone to have poor credit if their score is 438 or below, Experian if it’s 720 or below, and TransUnion if it’s 565 or below. To further complicate this, each individual lender will have its own criteria for what it considers to be bad credit.
You can check your credit score for free online.
What are the alternatives to a bad credit loan?
Personal loans for bad credit are not your only option if your credit score is less than perfect. Some alternatives you could consider include secured loans, guarantor loans, and credit cards. You may think about getting a payday loan, but these are very expensive and can be risky.
Rhiannon is a financial writer for NerdWallet, with a particular interest in personal finance and insurance guides for consumers. Read more