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Published 02 February 2024
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Best Bad Credit Loans February 2024

A less-than-perfect credit score won’t necessarily stop you from getting a loan. We’ve rounded up NerdWallet’s analysis of the best loans for bad credit, to help you compare their features.

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Many or all of the products and brands we promote and feature including our ‘Partner Spotlights’ are from our partners who compensate us. However, this does not influence our editorial opinion found in articles, reviews and our ‘Best’ tables. Our opinion is our own. Read more on our methodology here.

If you have a patchy credit file, it may still be possible to get a personal loan. There are a number of specialist lenders that accept applications from people who may have struggled with credit in the past and have bad credit histories.

You will have a more limited selection of loans to choose from than someone with a better credit score, and they will come with higher interest rates, so it’s important to compare providers to find the most suitable loan for your circumstances. It’s also important to consider whether a loan is the right option for you at all.

You should only borrow what you need and pay it back as quickly as possible, based on what you can comfortably afford to repay each month. Before applying for a loan, it’s important you consider whether you could keep making repayments if an unexpectedly high bill lands on your doorstep or you lose your job, for example. 

To help you see how expensive a loan is, lenders will display a figure called an annual percentage rate (APR) which tells you the total cost of a loan over one year, including interest charges and fees. You should consider this, as well as other key elements, to help you find the best loan for bad credit and decide whether a particular loan is right for you.

We’ve assessed many of the bad credit loans on the market and rated the lenders on the features they offer. Our star ratings are based on 20 of the features that a survey of bad credit loan customers said were most important, from payment flexibility and the ease of the application process to the customer support available. 

Nerdwallet Logo Partner Spotlight

Compare Loans

NerdWallet has partnered with Monevo. Check your eligibility from a range of loan providers without affecting your credit score, including:

Please enter a number from 1000 to 50000.

This loans eligibility service is powered by Monevo. The data you supply is directly submitted to Monevo and is used to retrieve loan quotes from Monevo’s panel of lenders, other loans are available in the UK loans market that are not included in this service. By using their loans eligibility service you are agreeing to Monevo’s terms and conditions and privacy policy which can be found at Monevo.co.uk. Neither Monevo or Nerdwallet Ltd carry out credit repair services. Late repayment can cause you serious money problems.

Best Bad Credit Loan Providers 

This selection of brands has been reviewed and evaluated by Nerdwallet, but others are available in the UK market. Find out what we mean when we say ‘best’, why we are comfortable using it, and an in-depth explanation of Nerdwallet UK’s review methodology.

LenderNerdWallet Star Rating
Abound
Lendable
Bamboo
Salad Money
118 118
Finio
Norwich Trust

Late repayments can cause you serious money problems.

Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing.

Important information: Our Reviews, Star Ratings and Editor’s Picks do not consider the product provider’s lending rates and therefore do not reflect how much it costs to borrow from the reviewed brand. Always compare rates from other providers when considering any type of borrowing. Loans for consumers with bad credit can have very high interest rates. Loan rates offered can be dependent on your personal circumstances and specific loan requirements. If you have poor credit, only borrow what is essential and if you can comfortably afford repayments.

4.0

Abound

Abound Personal Loan

Abound Personal Loan
  • Representative APR
    25.8%
  • Representative Example
    Representative APR 25.8%. Based on a loan of £2,000 over 36 months at an interest of 20.2% p.a. (fixed). Monthly repayments of £77.60. Total amount payable £2,793.60 (includes £130 fee).
  • Available amounts
    £1,000 to £10,000
  • Available Terms
    1 to 5 years
  • Joint Loans
    No
Check Eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be aged 18 or over.
  • Must have at least one UK bank account.
  • Must not have unresolved defaults or CCJs.
Pros and cons

Pros:

  • You may not need to pay interest charges if you settle your loan early.
  • You could get your loan on the same day your application is approved.
  • You can choose your payment date and may be able to change it during the loan term.
  • There are multiple ways to contact Abound for help and support.

Cons:

  • It charges a non-refundable loan fee, which is added to your total loan balance.
  • It could take up to two working days to get a decision on your application.
  • You can’t get a joint loan.

4.0

Lendable

Lendable Personal Loan

Lendable Personal Loan
  • Representative APR
    31.6%
  • Representative Example
    Representative APR 31.6%. Based on a loan of £7,500 over 36 months at an interest rate of 27.1% p.a. (fixed). Monthly repayments of £309.32 and total fees of £395.00. Total amount payable £11,135.56. Maximum APR 49.9%.
  • Available amounts
    £1,000 to £25,000
  • Available Terms
    1 to 5 years
  • Joint Loans
    No
Check Eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be aged 18 or over.
  • Must be a UK resident.
  • Must have a current account at a UK bank or building society.
  • Must have an income of at least £800 per month
Pros and cons

Pros:

  • You can get your loan within two hours after your application is approved.
  • You can choose your repayment date when you apply for the loan.
  • There are multiple ways to contact Lendable for help and support.

Cons:

  • Lendable charges a non-refundable loan fee as standard. You will pay this as part of your monthly repayments.
  • You can’t get a joint loan.
  • Lendable may apply interest charges to pay off your loan early.

3.5

Bamboo

Bamboo Personal Loan

Bamboo Personal Loan
  • Representative APR
    69.9%
  • Representative Example
    Representative APR 69.9%. Based on a loan of £2,500 over 24 months at an interest rate of 54.2% p.a. (fixed). Monthly repayments of £172.74. Total amount payable £4,145.76.
  • Available amounts
    £2,000 to £15,000
  • Available Terms
    1 to 5 years
  • Joint Loans
    No
Check Eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be aged 18 or over.
  • Must be a UK resident.
  • Must be able to afford monthly repayments.
  • Must not be bankrupt.
Pros and cons

Pros:

  • You could get your loan on the same day your application is approved.
  • You can change your payment date during the loan term.

Cons:

  • You may need to pay interest charges to settle your loan early.
  • You can’t apply for a joint loan.

3.0

Salad Money

Salad Money Personal Loan

Salad Money Personal Loan
  • Representative APR
    79.5%
  • Representative Example
    Representative APR 79.5%. Based on a loan of £1,000 over 18 months at an interest rate of 59.97% p.a. (fixed). 17 monthly repayments of £86.94 followed by a final payment of £79.58. Total amount payable £1557.56.
  • Available amounts
    £500 to £1,000
  • Available Terms
    12 or 18 months
  • Joint Loans
    No
Check eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be employed by your current employer for at least 6 months
  • Must be over 18
  • Must be paid monthly, rather than weekly
  • Must be earning over £1,400 per month
Pros and cons

Pros:

  • Your credit score isn’t considered as part of your loan application. 
  • There are no charges to pay off your loan early.
  • You can get in touch by phone, email or live chat.
  • You can change your repayment date.

Cons:

  • It can take one working day to get a decision on your application, and a further 24 hours before you get the money in your account.
  • You can’t take out a joint loan.
  • The amount you can borrow is more limited compared to other lenders.

3.0

118 118 Money

118 118 Money Personal Loan

118 118 Money Personal Loan
  • Representative APR
    49.9%
  • Representative Example
    Representative APR 49.9%. Based on a loan of £2,000 over 24 months at an interest rate of 41.2% p.a. (fixed). Monthly repayments of £123.64. Total amount payable £2,967.43.
  • Available amounts
    £1,000 to £5,000
  • Available Terms
    1 to 3 years
  • Joint Loans
    No
Check eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be between the ages of 18 and 70
  • Must have a minimum yearly income of £8,400
  • Must be employed or self-employed
  • Must be a UK resident and hold a current UK bank account and debit card
Pros and cons

Pros:

  • You can change your payment date.
  • You could get the money in your account within a couple of hours.
  • 118 118 Money has a mobile app that you can use to manage your loan.

Cons:

  • 118 118 Money will apply interest charges if you want to pay off your loan early.
  • You can’t apply for a joint loan.

3.0

Finio

Finio Personal Loan

Finio Personal Loan
  • Representative APR
    39.9%
  • Representative Example
    Representative APR 39.9%. Based on a loan of £2,000 over 24 months at an interest rate of 39.9% p.a. (fixed). Monthly repayments of £116.07. Total amount payable £2,785.68. Maximum APR 69.9%.
  • Available amounts
    £1,000 to £5,000
  • Available Terms
    1 to 3 years
  • Joint Loans
    No
Check Eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be aged 18-73 years old.
  • Must be a UK resident.
  • Must have a UK personal bank account.
  • Must be confident you can afford the monthly repayments.
Pros and cons

Pros:

  • You could get your loan on the same day Finio approves your application.
  • You can choose your payment date and change it during the loan term.
  • There are multiple ways to contact Finio for help and support.

Cons:

  • You can’t get a joint loan.
  • Finio will apply interest charges if you want to pay off your loan early.

3.0

Norwich Trust

Norwich Trust Personal Loan

Norwich Trust Personal Loan
  • Representative APR
    31.9%
  • Representative Example
    Representative APR 31.9%. Based on a loan of £11,500 over 66 months at an interest rate of 28.01% p.a. (fixed). Monthly repayments of £343.29. Total amount payable £22,657.14. Maximum APR 34.9%.
  • Available amounts
    £3,000 to £20,000
  • Available Terms
    3 to 10 years
  • Joint Loans
    No
Check eligibility with Monevo

Nerdwallet has partnered with Monevo. Check your eligibility with this lender and from a range of loan providers without affecting your credit score.

Eligibility Criteria
  • Must be a homeowner.
  • Must be aged 21 or over and under 71 at the end of the loan.
  • Must have been a UK resident for at least 2 years.
  • Must have a net annual income of at least £15,600.
Pros and cons

Pros:

  • The maximum loan amount of £20,000 is higher than some bad credit lenders we’ve reviewed, but keep in mind that you should only borrow what you need.
  • You can choose to repay your loan over a term of 10 years, which is longer than most bad credit lenders that we’ve reviewed. However, a longer term means that you will pay more in interest overall.

Cons:

  • You need to be a homeowner to apply, but your property won’t be used as security.
  • It could take two or three days to get a decision on your application.

The pros and cons featured with each brand are chosen by us based on a combination of our expert opinions from research of the product market and an exclusive survey of UK consumers conducted on behalf of NerdWallet UK to identify the features that people feel are most important. There are other pros and cons that should be taken into account before considering a financial product. Information was correct at the time of publication but may have changed since.

Nerdwallet Survey: February 2023

What is a bad credit loan?

Bad credit loans are designed for people with a poor credit score, which could be caused by past money troubles or a limited credit history. Because people with bad credit are viewed as a higher risk by lenders, they can find it more difficult to access loans and other types of credit. This is where specialist products such as bad credit loans could help.

Bad credit loans often have higher interest rates than standard personal loans, as well as lower maximum loan amounts and terms. 

You can use bad credit loans for many different reasons, such as car repairs, emergency expenses, or to consolidate your debts into one single repayment. Debt consolidation is likely to make the loan more expensive in the long term, but it can sometimes make the monthly repayments easier and some find managing one payment, instead of several, easier to keep track of. 

Some people take out a bad credit loan, or a credit builder loan, to try to improve their credit score to show they can manage debt responsibly. But, if you do this, you need to be certain you can afford to repay the loan in full and on time.

What is bad credit?

If you have bad credit, it means credit reference agencies (CRAs) view your credit history more negatively.

Having bad credit may mean you have made late payments, missed payments, or defaulted on credit in the past. You may also have an individual voluntary agreement (IVA), a debt relief order (DRO), or a county court judgment (CCJ).

You may also be judged to have bad credit if you haven’t been able to build up a credit history, if you are young or you’ve recently moved to the UK, for example.

The three main CRAs have different scoring systems, so there is no single figure to indicate you have bad credit.  These scores and definitions are decided by the CRAs and can change. At the time of writing, the CRAs judge someone to have “poor credit” if they have the following scores.

(Accurate as of June 2023)

To further complicate this, each individual lender will also have its own criteria for what it considers to be bad credit and this will affect your eligibility from one lender to the next. 

But once your credit file reaches a certain point, for example evidence of an IVA, you will need to spend some time rebuilding your score before you consider applying for more credit. 

» MORE: What is a bad credit score?

Types of loans for bad credit

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.

Personal loans for bad credit

There are various lenders that will consider offering a personal loan to people with bad credit histories. Personal loans are unsecured and 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.

Secured loan

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 loan with bad credit.

Guarantor loans

A guarantor loan is when your application is backed by another person (usually a friend or family member). 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. Both credit files would be negatively affected if the loan is not repaid on time 

Debt consolidation loans

This is actually a description of what you might use a loan for. 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.

Nerdwallet Logo Partner Spotlight

Compare Loans

NerdWallet has partnered with Monevo. Check your eligibility from a range of loan providers without affecting your credit score, including:

Please enter a number from 1000 to 50000.

This loans eligibility service is powered by Monevo. The data you supply is directly submitted to Monevo and is used to retrieve loan quotes from Monevo’s panel of lenders, other loans are available in the UK loans market that are not included in this service. By using their loans eligibility service you are agreeing to Monevo’s terms and conditions and privacy policy which can be found at Monevo.co.uk. Neither Monevo or Nerdwallet Ltd carry out credit repair services. Late repayment can cause you serious money problems.

Pros and cons of bad credit loans

Outlined below are some of the advantages of a bad credit loan:

However, you need to consider some of the downsides of getting a bad credit loan:

What to consider when taking out a bad credit loan

Before applying for a bad credit loan, you should think carefully about whether it is the best option for you.

When you take out a loan, you are taking on a debt that will need to be repaid so you need to be confident that you can afford to borrow this sum of money.

To help you decide whether a bad credit loan is right for you, ask yourself:

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 repay each month. This will help you when you start looking at different loans as you know how much you can afford to borrow. 

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.

If you’re thinking of applying for a loan, check the eligibility criteria of the lender. Every lender has different requirements, with some only accepting applications if you earn above a certain income.

As a minimum, most lenders will require applicants to be at least 18 or 21 years of age and a UK resident.

You can often check your eligibility for a loan before you formally apply. Checking your eligibility won’t affect your credit score and it allows you to see how likely you are to qualify for different loans, reducing your chances of applying for an unsuitable loan.

You should only formally 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.

To apply for a loan, you will need to provide the lender with personal information and details about your finances, such as your:

Lenders will also run a hard credit check as part of your application. This will be recorded on your credit history. Multiple applications will have a negative effect on your score so make sure you only apply for loans you feel confident of successfully getting.

How to improve your credit score

A better credit score can help to increase your chances of getting approved for a loan and being offered better rates of interest. 

There are a number of ways to improve your credit score, including:

Alternatives to bad credit loans

Before applying for a bad credit loan, it’s worth considering if there could be a more suitable option for your situation.

Borrowing money isn’t always the answer. If you’re struggling to afford your living expenses or finding it hard to make payments on any existing forms of credit, it’s worth asking for professional debt help. There are several debt charities that can offer free support and guidance on your situation.

Best bad credit loans methodology

NerdWallet has evaluated and reviewed 13 consumer bad credit lenders in the UK.

We considered 20 data points for each loan, based on the criteria that matter most to customers, scoring them on loan features, flexibility, application process and availability of customer support, among other factors. This information was gathered from each lender’s website, company representatives and independent financial product analyst Defaqto. In addition, we regularly add new brands and our editorial team reviews them against the same criteria for consistency and accuracy.

Using the same data across all products and features, we were able to create star ratings, presented on a scale of one to five stars, where a one-star score represents ‘poor’ and a five-star score represents ‘excellent’.

Important information: Neither the review nor ratings considered the lender’s lending rates, and therefore does not reflect how much they charge to borrow from these lenders. Loans for bad credit consumers can come with very high interest rates. Always check and compare a lender’s rates against others on the market when considering a bad credit loan.

Late repayments can cause you serious money problems.

Consolidating multiple debts into one loan can extend the term of your borrowing and increase your cost of borrowing.

Debt charity information

If you are struggling with debt, seek advice from one of these debt advice services:

Frequently asked questions about bad credit loans in the UK

What loans are easiest to get with bad credit?

Loans from specialist bad credit lenders are likely to be easier to get if you have a bad credit history. Depending on your circumstances, you could also improve your chances of acceptance if you apply for a secured loan or a guarantor loan. The extra security of these loans can give the lender more reassurance that they will get their money back.

However, you should consider the risks involved with these types of loans before applying. For example, secured loans come with the risk that you could lose your property if you fail to repay the loan.

What can I use a bad credit loan for?

You can use a bad credit loan for a variety of reasons. Lenders will often ask what you plan to use the loan for as part of their application process.

Will anyone lend me money with bad credit?

Certain online lenders may be able to offer you a loan if you have bad credit. However, this will depend on your individual circumstances and factors such as your income. Many lenders will allow you to check your eligibility for a loan, so you can see how likely you are to be accepted before applying.

Will applying for a bad credit loan affect my credit score?

Possibly. Whenever you apply for a loan, the lender will conduct a hard credit check, which will be recorded on your credit history. This could temporarily affect your credit score, but if you make your repayments and manage your other credit commitments responsibly, your score should recover.

Making several applications for credit within a short space of time is likely to have a more significant negative impact on your credit score. As will one or multiple declined applications.

Can I get a loan without a credit check?

All authorised lenders have to run affordability checks as part of the application process for a loan, which in most cases, will involve a credit check. However, you can often check your eligibility for a loan without a hard credit check.

There may be some lenders that may not run a credit check at all, and assess your ability to repay a loan in other ways. But always double check that the lender is authorised before taking out a loan.

Borrowing from a family member or friend could be an option if you need money but want to avoid a credit check. However, you should consider the possible risks involved and only borrow from someone you know and trust. Never borrow money from someone that you don’t know as they could be a loan shark.

What can I do if I’m rejected for a loan?

If your loan application is declined, don’t try to apply for another loan straight away. Applying for a loan involves a hard credit check, which will appear on your credit history, and multiple applications could affect your credit score.

Instead, it’s a good idea to check your credit score and try to work out why your application was rejected. You can then take steps to improve your score, which should hopefully improve your chances of getting accepted for a loan in the future.

Can I get a loan if I have a CCJ?

It may be possible to get a loan with a CCJ, but this will depend on the lender and your individual situation. Some lenders won’t lend to you if you have a CCJ, but other lenders may consider your application. However, they will only offer you a loan if they think you can afford to repay it in full. You are likely to be charged a higher rate of interest if you are approved for a loan.

Think carefully before borrowing any money, and consider whether it’s the right option for you. It may be more appropriate to wait and improve your credit score or get professional debt help, for example.

Review methodology

At NerdWallet UK, we base our reviews and our ‘Best’ pages on the results of surveys we undertook about what was important to people who use these products. This allows us to look at products impartially of any commercial arrangements we have and fairly rate the products on the same set of criteria.

Best means our ‘Best’ and is based only on what products we have aligned to our surveys, which form the basis of our reviews and ratings. This means that there will be other products on the market that we have not included in our ‘Best’ pages. Best does not mean it’s best for you, nor does it mean the ‘cheapest’.

Our reviews may display lenders’ rates. This additional information has not been included in our evaluations but is still very important when choosing a product. Rates offered can depend on circumstances, amount and term. Always check details before proceeding with any financial product.

Product details reflect the information that was available at that time but may have changed since. We strive to give you a review on as many products as possible, but there will be products not included on the market. The review is our opinion, but it does not constitute advice, recommendation or suitability for your financial circumstances.

You can view our full review methodology here.

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