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Borrow £500 for 4 Months, Four Monthly Repayments of £215.81 Total repayment £863.24 Interest Rate PA (fixed) 270.10% Representative APR 997%
Small Loans for Bad Credit
Everyone seems to have their own idea of what small loans for bad credit are but generally speaking, they are loans anything from £200-£2000 that can cater borrowers who have poor or none-existent credit histories.
In the UK, there is a wide assortment of desperate loans lenders that offer small loans for bad credit with varying eligibility criteria, interest rates and payment terms. Some of the most popular ones you can find in the country include:
The small loans for bad credit are basically cash advances wherein you borrow money from a payday lender and pay it back in your next payday. The loans can easily be taken out by anyone who has a job and is enjoying a regular salary although there are available options for those who are unemployed and living under benefits as well.
Payday loans are small loans for bad credit that provide instant funding. It typically takes less than 15 minutes to complete and application and receive an approval response from a lender. And once approved, the money will be ready for use in the same day or the next business day. You can apply for the financial products in a physical store or online in a lender’s secured website depending on your preference.
The safe small loans for bad credit are arranged at your home by a friendly local agent representing your lender. This means that you don’t necessarily need to have a bank account to become approved as the money will be personally handed to you in cash at your own place once you sign the loan contract. The same agent will then return to your home to collect the repayments of your home loan typically every week or sometimes in a fortnightly basis.
Peer to peer Loans
The small loans for bad credit are offered by private investors in the UK who are linked to qualified borrowers in a secured online platform. The interest rates for the type of bad credit funding are competitively low – sometimes even lower than a bank loan’s.
The small loans for bad credit allow you to enjoy competitive rates with flexible payment terms even if you have an unappealing credit score. The type of instant financing will require you to have someone who is willing and eligible to back up your credit application and serve as a guarantor in your credit agreement. He or she will guarantee that your debt will be paid in full which means that if you are unable to cover the repayments, the guarantor will be the one to step in and shoulder all of them.
Online installment cash loans
These types of small loans for bad credit work like payday loans in a way that you can secure small amounts of funding even if you have very bad credit rating. This means that the eligibility criteria is relatively few and basic, with income and affordability as the main requirement in getting approved. The loans are also easily accessible online with an assortment of reputable lenders offering them.
The main difference they have with payday loans lies in their payment terms. Payday loans normally require you to pay back the entire money that you borrowed in a single lump sum plus fees and interest rates that have been agreed upon. Installment small loans for bad credit meanwhile, will allow you to pay back your credit balance in numerous fixed payments for over 6 months or longer. This makes them easier to pay off compared to payday loans.
What to avoid with small loans for bad credit
If you are looking to apply for small loans for bad credit, the first and most important thing that you need to bear in mind always is to choose a lender that is licensed by the FCA or Financial Conduct Authority. While majority of lenders you can find online are legit and reputable, there are those who are not and they either fall to the category of loan sharks or scam sites.
These types of elicit lenders will trick you into entering into a solution loan agreement that have extremely exploitative rates and terms. And much worse, there are even those who will simply trick you into paying some form of fee or payment in exchange for nothing.
With that being said, its imperative that you work with a lender that is licensed and authorized by the FCA to ensure that your small loan for bad credit is genuinely safe and legal for use. And if there are any issues on your loan that your lender will refuse to address, you can rest assure that you can enjoy proper legal backing and representation from the FCA.
Pricing and costs to consider with small loans for bad credit
If you scour the market for small loans for bad credit, you will notice that the price will differ for every lender. For this reason, it is vital that you shop around and weigh the available options carefully so you will find the right deal that offers the most affordable price.
Now small loans for bad credit will normally have higher rates compared to standard loans such as bank loans that are available to people with good credit ratings. This is because the lowest rates are often reserved to those who have good to excellent credit as they are considered less riskier.
When you apply for bank loans with low rates but have bad credit, chances are, your application will be denied. If it does happen, your credit rating may be tarnished further resulting to an even lower score and fewer accessible loan options. So if you have bad credit, it would be best to limit your application to small loans for bad credit and the like.
Final thoughts on small credit loans for bad credit
Because there is an assortment of lenders that provide small loans for bad credit in the market, prices will vary significantly from one credit provider to the next. With that being said, it is imperative to be wise on your decisions and to compare the options that you can qualify for first. And never forget to borrow only what you can afford so you will have no trouble in covering your loan’s repayments throughout its duration.
5 most recent personal loan reviews
I love CSC loans I have been with them nearly three years, need a top up as my son is getting married. They where brilliant as usual, no problems, done so quick - they were my life savers when needed most, thank you.
Review posted by Mary Hartnoll, Canterbury
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Value For Money
As guarantor for my daughters, loan the service we got was quick and efficient, did checks, asked questions and all was sorted very quickly, would definitely recommend Together loans to all.
Review posted by Susan Mills, Darlington
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Brilliant service. The application process was a doddle, the Shawbrook representative who called me was polite, understanding and cheerful. The whole thing (from starting the application process to receiving the money) took around 3 or 4 hours. Very quick and efficient and no long or silly forms to fill out. Just what was necessary. Am very pleased I chose Shawbrook.
Review posted by John Marcus, Surrey
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Value For Money
Representative 277.5% APR
Representative Example: Borrow £700 and pay £111.27 per month for 12 months at an interest rate of 140% per annum (fixed).
The total charge for credit is £635.24 The total amount repayable is £1335.24. Representative 277.5% APR (variable). Your APR rate will be based on your circumstances
Non-payment could have a negative impact on your credit rating and have increased charges and interest rates.