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If you’ve struggled to get a loan in the past, it’s possible that a low credit rating and poor credit history are to blame.

Compare bad credit loans

When you need a cash injection, it can be tough to know what route to take – credit card, loans, borrowing from friends or family… But when you also have a bad credit history, it’s not just a question of choosing the right route – often finding one in the first place is hard enough. However, it’s not all as bad as it seems, you do have options for raising funds – and they don’t involve scrabbling down the back of the sofa; here’s what you need to know.

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Overall maximum APR example:

Maximum APR

Interest rate

99.9% APR (fixed)

99.9% p.a. (fixed) with 24 instalments of £158.56pm

Based on borrowing

Total amount payable

£2,000 over 2 years

£3,805.44 inc. interest of £1,805.44

It’s important to remember every time you are refused an application for a loan it may impact your credit rating. It is advisable to only apply for the loans that you are confident of being accepted for.

Warning: Late repayments can cause you serious money problems. For more information see our debt help guides.

Claim Anything is a credit broker, not a lender, for consumer credit products. Our services are provided at no cost to you, but we may receive a commission from the companies we refer you to.

Loans for bad credit in the UK

If you currently experiencing financial difficulties or have damaged your credit score in the past, you may worry about not qualifying to borrow for a personal loan.

However, there are personal loans for bad credit available. Even if you think you have no credit there could be a loan available. You may be able to borrow from a high street lender at a higher rate than their standard personal loans. Alternatively, you could borrow from a specialist company who lend to those with bad credit. So you don’t necessarily need a bank loan for a bad credit loan, there are alternatives (but make sure you check out who you will be dealing with and don’t get caught out with a dodgy lender).

If you have bad credit some lenders will require you to have a guarantor before they’ll lend to you. A guarantor is someone who is willing to step in to meet your repayments if you find yourself unable to.

If this option is not available to you, it is possible to get a no guarantor bad credit loan, it may need to be secured against your home or it can be unsecured, but will likely come at a higher than typical APR.

What are the advantages of a bad credit loan?

The most obvious answer is that it provides access to credit to those who otherwise would be locked out of borrowing.

Typically a loan will be a cheaper way of borrowing money than through a credit card, you can also usually borrow more and plan the lifetime cost of the loan up-front.

Also it can help those with poor credit ratings to repair their credit score. If all repayments are met for a bad credit loans are met on time, this demonstrates that borrower is reliable and they will see their credit score improve.

What are the disadvantages of a bad credit loan?

Typically the interest rates charged are significantly higher for those borrowing on a bad credit score. Unfortunately those applying for bad credit loans typically have had difficulty managing their finances in the past. Lenders will consider them to be higher risk borrowers and will charge higher rates to reflect this.

As with any personal loan if you don’t keep up with repayments you could face penalties charges and even CCJs or Bankruptcy.

Things to consider before applying for a bad credit loan?

Longer repayment periods should give you lower monthly repayments, but ultimately you will pay more interest than if you try and pay the balance off quickly. Though, either way make sure to not overstretch yourself and ensure the monthly repayments are within your budget.

Often interest rates for loans get lower the more you borrow, based on a tiered system. If you are almost borrowing enough to benefit from the lower it rate of the tier above, it might be worth borrowing a little bit more to save money on the lifetime of your loan. Importantly, make sure you only borrow what you can afford.

It could be worth starting off with smaller loans and working up to larger amounts as you improve your credit score through sustainable borrowing.

How we calculate Rep. Example, Total repayable and Monthly repayments

The calculations on the table are designed as an indicator, and may not be exactly what you end up paying. This is because different suppliers have slightly different ways of calculating these figures. However, they will be very similar to the final amounts, usually within a few pounds of the final total and you will always see the final repayment amounts before signing the credit agreement.

Who do we include in this comparison?

We include unsecured loans you can get in the UK from our panel. Like other comparison sites, we make money when you click through to a product or service, or go on to purchase it after visiting our site. If you use one of our broker services, we make commission after you buy a product, but it doesn’t cost you anything extra. Our comparisons are free for you to use and you get the same or a better deal than going direct.