A lot of adults in the UK now have trouble with low credit scores in all parts of the country. More and more people have received bad ratings in recent years. There are things that are out of your control that can show up on your credit file.
Missed bills and late payments stay on your credit file for a long time. These marks will stay on your credit report for up to six years. The long-lasting effect makes it harder for most people to borrow money in the future.
For people with bad credit, secured loans are one way to move forward. In many cases, your car or other assets can help you get an easy loan approval. The lender gets extra security, which helps them get over problems with their credit score.
Apart from those secured loans, there may be some short-term loans that accept anyone for emergency needs. Thedirect lender method gets rid of middlemen who could charge extra fees. For faster results, your application goes straight to the source of funds. These lenders make their products just for people who have trouble getting credit.
| Loan Type | Typical APR | Loan Amounts | Repayment Term |
| Short Term Cash Loans | 400% – 1,500%+ | £100 – £1,000 | 1 week – 3 months |
| Instalment Loans | 9.9% – 49.9% | £1,000 – £25,000 | 1 – 7 years |
| Joint Loans (Bad Credit) | 15% – 35% | £1,000 – £15,000 | 1 – 5 years |
| Guarantor Loans | 25% – 50% | £1,000 – £15,000 | 1 – 5 years |
| Doorstep Loans | 200% – 400%+ | £100 – £1,000 | Weekly collections |
People with bad credit can choose from several loan options in the market. The best loan for you will depend on your needs. Many financial experts say you should look at least these different loan options first.
These small loans are usually for a few weeks or months and are intended to help with short-term cash needs. You typically pay back the full amount in a single payment on your next payday. Most people use these for bills or costs that come up suddenly between paydays. In many cases, the online application process only takes a few minutes.
These loans let you pay them back over months or even years. Instead of one big payment, you can make smaller payments every month. Most people who borrow money find these easier to handle than short-term loans. The fixed payment schedule makes it easier to plan your monthly costs.
Two people can apply for these loans together to improve their chances of getting approved. If your partner or family member has better credit, they can help you fix your score problems. Many couples opt for joint loans for bad credit with instant approvalwhen one of them has credit problems. Affordability checks assess the household’s total income.
These loans have a second person who agrees to pay if you can’t. The lender sees your friend or family member with good credit as a safety net. Many young adults or people looking to improve their credit use this option. The trust part is a big deal with this type of loan. You need a strong, open connection with the guarantor.
These traditional loans require agents to come to your house to collect payments. The agent who comes to your house to collect your weekly or monthly payments gets cash. Most people who borrow money these days choose online options over these loans.
A lot of people don’t pay attention to small details that can make or break your application. The things you do before you apply can make a big difference. Most lenders look at more than just your credit score when deciding whether to lend you money. Your preparation work could change a likely rejection into an approval.
Loans for people with lower credit scores usually have higher interest rates. The rates show that lenders are taking on more risk when they make these loans. In most cases, your total cost will be higher than that of standard loan products.
Rates for many products on the market range from 20% to 50%. You should still be focused on the difference between your monthly payment and your income.
Can I get a joint loan with bad credit and no guarantor?
Yes, you can. A lot of lenders look at your total income instead. If your partner has good credit, that really helps your case. Most of the time, APRs are between 28% and 39%.
What are the best debt consolidation loans for bad credit in the UK?
If you own property, secured loans are the best option. That way, you’ll get much better rates. There are unsecured options, but the interest rate will be around 30% to 35%.
How do I get approved for a personal loan with very bad credit?
Look for lenders who care more about how much you can afford than your score. Do you have a car or a house? Put it up as collateral. That makes a big difference.
Jennifer Powell embraced finance writing just the moment she started working as a finance executive with EasyCheapLoan, which is a direct lender in the industry. Jennifer has an exceptionally keen eye for details and used her skills to pen down numerous blogs and articles on finance. When asked, she simply replies with a look on her face that shows how genuinely she cares for people struggling with financial problems. Jennifer works dedicatedly as a finance professional and considers sharing both her experiences and knowledge to increase the financial literacy of people and businesses.
