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Bad Credit Loans: Loans for People with Bad Credit

We Have Lenders Who Consider All Credit Types… No matter How Poor!

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How much do you want to borrow?

100
1600
10000
£1,600

How long do you want to borrow for?

12
18
60
18 months
  • For People with Poor Credit
  • Adverse History? Arrears? CCJ’s?
  • Specialist Bad Credit Lenders

How Can Loanable find me Bad Credit Loan?

  • We have a Simple Quick-To-Complete Application
  • We Instantly pass on your Application to all Market-Leading Bad Credit Specialist Lenders
  • Our Panel of Lenders is Constantly Increasing, so our Customer Success Rate is too!
  • Our Lenders will consider your Application no matter how Poor your Credit
  • We only work with Lenders who provide the most Responsible and Affordable Loans

Why use Loanable?

  • Borrow From £100 - £25,000
  • Same-Day Pay-Out Lenders on our panel*
  • Instant Access to all Major Bad Credit Lenders
  • Bad Credit? Defaults? CCJ’S? No problem*
  • High Pay-Out Success Rate for Applicants who’ve previously been Declined

How Loanable Works

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    Search for a loan
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    Lender may be found
  4. Dollars
    Complete application with lender
What is a Bad Credit Loan?

What is a
Bad Credit Loan?

A bad credit loan is a high interest, short term loan predominantly taken out by borrowers
with bad or poor credit.

Bad Credit Loans are also taken out by people with little or no credit history, lacking the track record to demonstrate to mainstream lenders their ability to re-pay debt.

The rise in people who are struggling with their finances and the rise in Insolvencies in the UK has made Bad Credit Loans the most attainable loan product for these ever-increasing groups of individuals.

Banks Are Changing How They Lend

Within the banking industry, there have been significant changes in recent years. In particular, after the“credit crunch” stemming from the serious recession of 2008, banks tightened up the criteria regarding how much they would lend - and to whom. From 2008 onwards, the banks have required a high or even near-perfect credit score to qualify for loans.

Going forwards, the fall-out from Brexit may see the banks continue to apply stringent criteria before offering a loan. This may lead to even greater numbers of borrowers in need of an injection of cash turning to alternative forms of lending, such as bad credit loans.

The Basics of Bad Credit Loans

Bad credit loans are a form of borrowing for people with bad, little or no credit. A Bad Credit borrower’s credit score is very likely to be below what a high street bank or lender requires to approve a loan.

As a summary, the reasons why the borrower’s credit score may be low include:

Bad or Poor Credit – The borrower may had credit in the past, but may have defaulted on accounts, missed payments on credit cards, mortgages, car finance or loans, and/or may have had experienced CCJ’s (County Court Judgements) repossessions, bankruptcy and other adverse factors.

No Credit – The borrower has no credit history

Little Credit – The borrower has little credit or had little credit in the past.

All of these factors can negatively affect a borrower’s credit score, thereby leading them to seek a bad credit loan.

Differences Between a Bad Credit Loans
and a Mainstream Loan

The main differences are as follows:

Interest Rates – Interest rates tend to be higher for a Bad Credit Loan than other types of loans. This is due to the lender off-setting the greater risk of the borrower defaulting. Borrowers with high credit scores will tend to get lower or better interest rates and have a greater variety of loan products available to them since they will be adjudged more likely to keep up with re-payments.

The Term of The Loan – Bad Credit Loans may have a shorter term in which they are to re-paid: generally the maximum loan period is 36 months although the loan re-payment period offered is often several months. Borrowers with good credit may be allowed to repay the loan in up to 60 months.

Other Conditions - Bad credit loan providers may require something or someone to secure the loan against - such as a vehicle in the instance of a log book loan, or a guarantor in the instance of a guarantor loan.

People with a good credit rating are more likely to have loan products available to them that don’t require these forms of security.

The Upside and
the Downside of
Bad Credit Loan?

The upside of a bad credit loan is that it can provide funds to someone who won’t be able to secure them in any other way.

The downside is that the interest rates are almost always higher than is the case with almost all other loan products.

In addition, the borrower may not be eligible for the full amount they wanted and they may have a short repayment period imposed on them, making the re-payment instalments high.

The Contract

When it comes to bad credit loan contracts, or contracts for any other type of loan, there are some key terms to consider:

The Loan Amount - How much are you borrowing

The Monthly Payments – How much are you paying each month for the loan

The Term of The Loan – The period over which you will be repaying the loan - and the number of instalments

The Total Loan Amount – This is the amount you originally borrowed plus all the interest and any fees

The Interest Rate - This will be expressed as an APR or Annual percentage rate

APR in more depth

When reviewing APR, you need to be aware of typical APR and representative APR as they are different from one another.

Typical APR’s are the interest rates most borrowers will receive, usually 2/3rds of borrowers. Representative APR’s are the interest rates that are advertised, but in reality only 51% of borrowers need to actually receive this rate.

Guarantor Loan

Guarantor loans are loans for those borrowers who may have bad, little or no credit but have someone who is willing to guarantee the loan should the borrower default.

These loans generally have a re-payment term of up to 36 months and may well have a lower rate of interest than is the case with an unsecured bad credit loan.

The loan can be used for almost all legal purposes, popular choices including the purchase of a car or improvements to a property.

The Guarantor can be anyone who is of the appropriate age ( at least 18 with a upper cap sometimes of 75); who is a UK Citizen with a UK Bank Account; and who is deemed by the Lender to have an adequate credit rating.

(Depending on the Lender, additional credentials may be also required).

Pros of a Guarantor Loan:
  • Longer term to repay the loan (than is often the case withunsecured bad credit loans) of up to 36 months - and sometimes longer
  • Lower interest rates than with many other bad credit loans.
  • Greater potential borrowings offered by the lender
  • Bad, Little or no credit on the part of the lender may not be a factor as it is to a large extent the financial health of the guarantor that is being appraised.
Cons of a Guarantor Loan:
  • Finding someone who must undertake the responsibility of re-paying the loan should the borrower default

Payday Loan

In recent years, payday loans have been in the news for a variety of reasons, although usually negative ones; in particular, for their high interest rates, hidden fees and aggressive debt collection practices.

Payday loans have become increasingly heavily regulated by the FCA (Financial Conduct Authority), meaning that over the last few years roughly 40% of payday lenders have shut up shop due to the new regulations. In particular, there are now greater caps on fees and other charges. In addition to this, there are stricter regulations which require more transparent explanations of what any fees and charges are for - and how, why and when they can be applied.

However, payday loans remain a means of bad credit lending.

To qualify for a payday loan, you basically need UK residency and citizenship; proof of some source of income; proof of address; a UK bank account; and to be at least 18 years of age.

While payday loans will typically be granted without a credit check being performed, thereby leaving no negative “foot print” to adversely effect your credit rating, they carry a very high interest rate or APR and historically have had to be re-paid in a single instalment within 30 days.

Pros of a Payday Loan:
  • No credit check
  • Quick approval
  • The money can be in your bank account within a few hours
  • Fairly straightforward criteria and high success rate
Cons of a Payday Loan:
  • High interest rates, some upwards of 1500%
  • The loan typically has had to be paid back on your next payday, usually within 30 days - although re-payment periods are increasingly being extended in the payday loan marketplace.

Doorstep Loan

Less common than in days gone by, a doorstep loan involves a lender visiting someone at their property (usually in poorer neighbourhoods) and offering what is almost always a cash loan.

The loan amount is usually £500 or less and re-payments are collected in person, usually on a weekly basis by the lender and/or one of their representatives.

This form of lending is completely unregulated, so no credit checks apply. However, it is a very expensive and potentially intimidating way of borrowing money.

Pros of a Doorstep Loan:
  • No credit check, so bad, little or no credit are OK
  • Cash on the spot
Cons of a Doorstep Loan:
  • Very high interest rates
  • Lower loan amounts
  • Possible weekly payments
  • Physically intrusive form of borrowing

Unsecured Instalment Loans

Less common than in days gone by, a doorstep loan involves a lender visiting someone at their property (usually in poorer neighbourhoods) and offering what is almost always a cash loan.

The loan amount is usually £500 or less and re-payments are collected in person, usually on a weekly basis by the lender and/or one of their representatives.

This form of lending is completely unregulated, so no credit checks apply. However, it is a very expensive and potentially intimidating way of borrowing money.

Pros of a Unsecured Instalment Loans:
  • No credit check, so bad, little or no credit are OK
  • Cash on the spot
Cons of a Unsecured Instalment Loans:
  • Very high interest rates
  • Lower loan amounts
  • Possible weekly payments
  • Physically intrusive form of borrowing

Credit Cards

Credit cards are desirable as they can be used for almost all types of transaction, all around the world. And if the balance is paid back promptly each month, it is possible to avoid paying interest.

However, getting approved for a credit card if you have bad credit can prove to be a challenge.

Credit cards are a revolving form of credit: as you pay the balance off you have access to more of your credit limit.

Credit card credit limits may start at between £200 - £500 for those without a strong credit rating. If the credit card is used regularly and the balance is paid off in a timely fashion, then the credit limit can progressively rise.

Some banks offer secured credit cards whereby the card’s credit limit is secured via a deposit or savings amount. So if for example you deposit £200, you have a £200 credit limit. One issue with some secured credit cards is they are not reported to any credit bureau, so in essence, they do not help in rebuilding or increasing a credit score.

Pros of a Credit Cards:
  • Can be used in most shops, stores, restaurants, hotels etc
  • Can be a way to rebuild your credit rating
  • You may receive annual or periodic increases in your credit limit
Cons of a Credit Cards:
  • You may receive a low credit limit to begin with
  • Charges / fees may be added to credit card transactions
  • Responsible use may not enhance your credit rating since credit rating agencies may have no records of transactions.

Peer-to-Peer Loan

Peer-to-peer loans, or P2P loans, are loans where individual or group investors pool their money together to grant loans to businesses and/or individuals.

Depending on their credit rating, borrowers may get a more favourable rate of interest with pee-to-peer loans than with other loan products. However, applicants with bad credit rating may be refused a loan altogether or have to pay high interest rates.

The lending criteria for pert-to-peer loans may be simpler and less stringent than other loan types, and an application has no negative impact on the applicant’s credit rating.

Pros of a Peer-to-Peer Loan:
  • Applications have no impact on the applicant’s credit rating
  • Application process tends to be quick and Easy
Cons of a Peer-to-Peer Loan:
  • A high rate of rejection for applicants with bad, little or no credit history
  • The loan amount offered can be less that the amount the borrower sought

How to make a successful
Bad Credit Loan Application

Being equipped to answer the following questions can increase your chances of receiving a loan:

  • What kind of bad credit loan do you require?
  • What is the loan going to be used for?
  • Is the loan going to be in just your name?
  • Can you satisfy the basic loan criteria of being a UK resident, at least 18 years of age, with a UK address, and a UK bank account with a source of income / revenue or other monies regularly going in to it?
  • For logbook and grantor loans, can you - or someone else - offer security for your loan?
Do your Homework

By knowing what type of loan you require, you can research lenders who provide the relevant type of loan. You can also compare the loan periods and interest rates of Loan offers we bring to you by carefully considering the loan agreements.

This way, you can ensure you get the loan that is best-suited to you.

If you are considering a guarantor loan, speak to friends and family who may be willing to act as a guarantor. First, though, you should responsibly assess your ability to re-pay the loan so as not to put your guarantor in a compromising position.

Check your Loan Eligibility

Many lenders and web sites offer eligibility checkers.

These eligibility checkers give you a provisional idea as to whether you will be approved for a loan or not, without leaving any mark on your credit report which adversely affects your credit rating.

Therefore, eligibility checkers are an extremely useful tool.

Further ways to increase your chances of a successful application
  • Get a copy of your credit report

    Know what your credit file looks like before you even apply. If something is missing, or if there are any errors, then contact the credit bureaus and make them aware of it. This could potentially improve your credit rating.

  • Gather documentation

    Get your wage slips, bank accounts, a reference from your landlord that you have paid your rent on time, a copy of your credit report (even though the lender will probably have their own), and a completed income and expenditure sheet. This shows how serious you are about getting your loan.

  • Know what you plan to use the loan for

    That way, if the lender asks what is the loan for, you can state a specific purpose clearly and easily which may increase your chances of success.

  • Complete your own income and expenditure form

    By already having an I&E form completed, you are in a better position to show the lender that you can afford the loan.
    Be aware that FCA-regulated lenders will largely base the amount they lend on the surplus of income once outgoings have been deducted incomings.

  • What to do if you have little or no credit history

    If you have little or no credit history, you may be aided by a letter of reference from your landlord to show you pay your rent on time. Character references from your employer may also increase your chances of being approved.

  • Show a pattern of savings

    If you are saving money each month, even a small amount, be prepared to show bank statements documenting this.

Credit Score & Bad Credit Loans

What is Credit Scoring and how Does it Relate to Getting a Loan?

In many instances, for many types of loan, the lender will want to review your credit history.

If you have bad, little or no credit credit history, this is going to be a hindrance to receiving a loan.
However, the better you understand credit scoring - and how to improve it - the better your chances will be of being approved for a loan.

Think of credit reports as basically being databases lodged with credit agencies.
Credit agencies collate information that banks and lenders regularly file with them on what could be a weekly, fortnightly or monthly basis.

Your Credit Score

Your credit report is made up of various sections which are assessed and combined to create a credit score.

The various sections are:
  • Details of your name, current address, and any previous addresses.
  • Who you hold your bank account(s) with; your account’s incomings and outgoings; how long you have had your account for;
  • the time your account may have spent in arrears or above your agreed overdraft limit; your account’s opening balance and current balance
  • Any potentially public records, such as CCJ’s or bankruptcies.
  • All this information goes towards making up your credit report, but only portions of it will go towards making up your credit score, as we will see below.

Credit Scores

A Credit score is a numerical value assigned to each person based on the following factors:

  • How you pay your bills – payment history

    Your payment history makes up 35% of your credit score. Therefore, late payments can have a strong negative impact on your credit score, while regular, timely payments can a have a strong positive impact on your credit score - and help to repair damage that has already been done.

  • The amount of money you owe

    This is also a substantial factor, comprising 30% of your credit score. Carrying debt and adding to debt can contribute significantly to poor credit scores. The regular, timely servicing of debt and the reduction of debt will, unsurprisingly, positively impact your credit score.

  • How long have you had credit and how have you managed it?

    This accounts for 15% of your credit score. This area takes in to account how well (or otherwise) you have stayed in credit on your accounts - and for how long. This area of your credit score is also determined quite strongly by how effectively or ineffectively you have serviced and managed the balance on your credit cards.

  • What kind of agreements do you have

    This represents 10% of your credit score. Your management of Mortgage and/or car finance agreements carry the most weight in this area

  • Applying for new credit

    This criteria represents 10% of your credit score. When you apply for new credit an inquiry or footprint is placed on your credit report. These footprints can reduce your credit score. This is especially the case for people who make repeated, unsuccessful credit (including loan) applications.

Two Types of Credit Report Enquiries
Soft Inquires:

A soft inquiry occurs when you check your credit report yourself. A soft inquiry also occurs when a potential employer runs an eligibility check against you.

The important thing to know about soft inquiries is that they do not affect your credit score.

Hard Inquires:

These are inquires by lenders when you apply for credit and they do affect your credit score.

How to Improve your Credit Score
  • Pay your bills, mortgage, car finance, council tax, loan and/or credit card payments on time.
  • Don’t take out too much credit, don’t max-out your credit cards and don’t go over agreed overdraft limits / credit limits.
  • Don’t apply repeatedly for credit.
  • Close any unused accounts.
  • Register on the electoral roll.
Credit Scoring: The Bottom Line

Ultimately, the higher your credit score, the more likely you are to be approved for a loan and to receive a lower interest rate.

The lower your credit score, the less likely you are to be approved for a loan. If you do receive one, the more likely the interest rate is to be high and the more likely the re-payment term is to be short.

All this is good to know when applying for any loan - especially a bad credit loan. If you can improve your credit score, even slightly, you not only stand a better chance of being approved, but also receiving a lower interest rate and a greater say over your re-payment period.

The Future of Credit Scoring

The way credit scoring is determined is likely to change significantly in the future by developing a more detailed and broad set of criteria.
These may include:

  • Landlord references
  • Social media contacts
  • Behavioral analytics – Things such as intelligence, ethics, honesty, drive, ambition all may be codified (in a ways that are not yet clear) for use in the future to form part of the credit scoring criteria. Therefore, credit scoring may no longer be all be about credit related matters per se.
  • Payment types - Payments made through Paypal, mobile banking, Paym, and even face recognition payments may form part of the credit scoring criteria
  • FAQs about Bad Credit Loan

    You must be at least 18 years old, a UK resident and have a UK bank account with an associated debit card. You will also need to show proof of some kind of income and you will most likely need a mobile phone. The criteria will vary for Guarantor Loans - and is set out elsewhere in the FAQ’S.

    Even though you have received an offer, you should still always be confident in your own mind that the re-payments are affordable to you.

    You should never feel pressured in to accepting a loan and since a bad credit loan is an expensive form of borrowing, we advise that you have a clear idea of what you want the money for - and that whatever that is warrants taking on the debt.

    Finally, you should carefully compare interest rates and re-payment periods between the different loan products you are offered to ensure you get the best deal.

    This will vary on a lender-to-lender basis, but you can expect them to require your employer details, your bank details, home address details, ID, and details relating to your income and current outgoings so that the lender can assess how affordable a prospective loan is to you.

    You can borrow between £100 - £25,000

    “Bad Credit” means that you have a low credit score which is a consequence of missing -or being late with - repayments on credit agreements such as a mortgage, credit card(s), store card(s) or loan(s). Repeated applications for credit can also contribute to a bad credit rating. Lenders will typically charge people with bad credit higher interest to off-set the extra risk of the applicant defaulting on repayments.

    The primary difference is that payday loans - which the regulatory services in the lending industry have stamped down on - are typically paid back in one instalment usually within 30 days; whereas bad credit loans are paid back in several instalments over a longer time frame.

    While the interest rates on bad credit loans vary from lender to lender and fluctuate depending on the individual circumstances of the borrower, the FCA have capped interest repayments at 0.8% per day.

    We highly recommend you never seek a loan if you’re not confident you can meet repayments. If you do default on a payment you may incur bank and interest charges and other fees and penalties; you may negatively affect your credit rating and the loan may be passed on to a collection agent who may pursue you for the full amount plus extra fees. Prolonged non-repayment may lead to court proceedings and a CCJ against you which is why it is crucial to borrow responsibly.

    Once Loanable have shared your details with the appropriate lenders on our market-leading panel, you can expect them to check your credit history.

    This is a mandate the Lender presents to your bank for the lender to be repaid the required, pre-agreed amount on a specific date of each month as per the loan agreement (Sometimes re-payment can be weekly or fortnightly)

    Providing you have sufficient funds, the re-payment amount will be released without any action being required on your part.

    Many of our panel of Lenders will permit you to do this. However, we at Loanable cannot guarantee it, so you will need to be in contact with the lender directly.

    If you feel you won’t be able to make a payment, you should contact your lender as soon as possible. It’s possible they may be able to arrange a deferral, although this may incur a fee.

    It’s also important to remember that missing payments can make it more difficult and/or expensive to receive credit in the future. It can also negatively impact your credit rating and it’s possible you can be pursued in the court, incur further costs, and have a CCJ issued against you.

    Not necessarily, no. Lenders will consider additional factors beyond the basic criteria so there is no way of knowing if you will be approved. The most important thing is that the lender is satisfied you can afford the loan once outgoings have been deducted from incomings.

    No. Bad Credit loans are usually unsecured, meaning that you do not have offer the lender any assets or security to get the funds. Exceptions to this are Logbook loans and Guarantor loans which are explained elsewhere.

    People with bad credit are generally at greater risk of defaulting on their loan. To off-set that risk and compensate for borrowers who default, the lender charges a correspondingly higher rate of interest.

    The FCA (Financial Conduct Authority) is the regulatory body which applies laws and statutes to the financial services industry. They aim to protect customers and determine the standards that lenders must meet. In the event of a genuine grievance to do with a loan provider, the borrower should consult the FCA: https://www.fca.org.uk/about. If a lender is experiencing financial hardship, they should contact the Financial Service Ombudsman: http://www.financial-ombudsman.org.uk/contact/index.html

    Yes, FCA-regulated Lenders will allow you to re-pay your loan early.

    A direct lender, as the term suggests, is able to lend money to the borrower without an intermediary. A broker such as Loanable uses your single application with us to directly connect you to the most suitable, market-leading lenders.

    This means we can have your application in front of dozens of Lenders within minutes. This saves you the time, labour and frustration of making a whole new application for each and every direct lender.

    Yes. Along with other criteria, this is a pre-condition of applying for a Bad Credit Loan.

    APR stands for Annual Percentage Rate. This essentially tells you the cost of a loan over the course of a full year. The APR figure is added to the capital amount of the loan and is a useful tool in choosing between different loans as it helps you compare the annual cost of a loan.

    Bad Credit loans often run for less than a year and often just for a few months. In this instance, the daily interest rate of the loan can be added to the principal sum to establish how expensive the loan is and to allow the customer to compare the cost of different loans.

    This is a loan requiring a credit-worthy person to guarantee your borrowings. This means that should you default, the guarantor will be legally obliged to re-pay the full loan amount on your behalf.

    At Loanable, we would advise you to be aware that non-FCA regulated loan providers can often charge higher interest rates than FCA regulated lenders so this could be a more expensive way of borrowing money.

    Yes, although this won’t make the outstanding amount disappear. Your lender and their partners can still pursue you for the outstanding loan amount and you can incur extra interest and penalties / fees.

    It’s generally only sensible to cancel a bank mandate if you are intending to set up the mandate with a different bank. In which case, you should inform the lender promptly and arrange the timely transition between mandated banks so as to avoid missing a payment.

    You should inform your Lender as soon as possible if you don’t think you can make a payment. It’s in their interests to find a solution and you may be able to agree on a payment plan with them and/or their partners. Missing payments and burying your head in the sand can lead to extra interest and penalties / fees and can even result in court action and a CCJ being filed against you.

    Regular, timely re-payment of your loans; timely mortgage re-payments; timely car finance re-payments; timely credit card and store card re-payments; and a regular stream of income passing through your bank account without you exceeding your agreed limits are various factors which will improve your credit rating.

    A bad credit loan can be used for pretty much all legal purposes. However, since it is an expensive form of borrowing, you should be satisfied in the first place that you really want the money and are confident you can pay it back.

    Yes, we can, but you can expect to have to show back statements showing your benefits having been paid in to your bank account. The lender will also want to be satisfied that after your benefits are deducted from your outgoings, the loan will be affordable to you.

    Yes, you can. But the lender will, as ever, want to be satisfied you can afford the repayments so you may need to have a source of income to display, such as through a part-time job.

    Some lenders cap the age limit of who they will lend to at 75 years old, so receiving a bad credit loan may depend on exactly how old you are. Beyond this, in addition to the other standard lending criteria of a having a UK bank account, being a UK citizen and having a UK bank account, the Lender may wish to see your pension statements to be satisfied your loan is affordable to you.

    Yes, we can. Once again, as long as the fundamental criteria set out above are met, the success of the application will come down to whether you are deemed to have enough surplus income to meet the re-payments.

    Your lender will typically require the monthly repayment of a set, fixed amount on a corresponding date of each month - or sometimes on a corresponding day of each week or fortnight.

    Continuous Payment Authority (CPA) means that upon signing a loan agreement, you consent to the lender automatically being authorised to debit a pre-agreed, fixed amount from your account for a fixed term - whether it be each month (or in some instances each week or fortnight, depending on your agreement)

    Your security and privacy is extremely important to us and we take numerous steps to protect your personal information. For more information, please visit our Privacy Policy.

    You can expect lenders, in addition to other criteria, to check your credit history and appraise how affordable the loan is to you. However, as the name obviously implies, bad credit does not mean you won’t get a loan!

    While it is possible for us to source you a second loan, this is an expensive form of borrowing, so you ought to be extremely confident that the extra repayments are affordable before committing to an additional agreement.

    Depending on the lender and how quickly you fulfil their requests, you could have the money on the same day although it can often take several days.

    Since we may well be working with lenders on our panel that the other company don’t have access to, then applying through us is definitely something you should consider. However, you should be aware that additional loan applications can leave footprints on your credit file which can adversely affect your credit score.

    All lenders require that you must be at least 18 years of age to apply. Some lenders apply an upper-age limit cap of 75 on those who are eligible for a loan.

    Since bad credit loans are typically unsecured, they do not require an asset as collateral. Loans requiring assets as security typically (although not exclusively) fall under the Homeowner Loan, Bridging loan and logbook loan brackets.

    Homeowner loans, which do use your property as security, are typically for greater amounts, are re-paid over a longer period and incur a lower rate of interest than is the case with Bad Credit Loans.

    Some lenders will allow you to do this if they deem the additional borrowings to be affordable to you. However, at Loanable we always advise customers to think carefully before requesting additional borrowings.

    Given the high rate of interest, the short re-payment term and the relatively small amounts of lending associated with bad credit loans, it is not really the best loan product for this type of requirement. A Homeowner or Bridging loan - both also available through Loanable - would be better suited to this purpose.

    Yes, you can. There’s no reason there would be a restriction on a bad credit loan being used for this purpose.

    Every loan provider has their own criteria so it’s hard know why your application was unsuccessful. Lenders will turn down applicants for several reasons, the main ones usually being the applicant’s poor credit history and the lender’s belief that the loan repayments will not be affordable to the borrower.

    The amount you re-pay each month will be a fixed amount set out in the loan agreement you sign, so the answer is no.

    You can contact the Financial Service Ombusman or The Financial Conduct Authority (FCA).

    No, the amount you pay back each month, with FCA-Approved lenders, should be fixed in your agreement, meaning what you re-pay isn’t altered by a change in interest rates.

    If you lose or change your job or move to a new address, it is important you inform your lender promptly.

    No. Once the first payment has been made, you will be expected to honour your agreement. Failure to make payment can affect your credit profile and cause you to incur additional penalties and fees. If you can’t afford to make a payment, you should contact the lender at the first opportunity as you may be able to arrive at an alternative arrangement.

    In theory, yes. However, an actual “Car Finance Loan” and other loan products which are also available through loanable.com may, depending on your circumstances, be a better option in terms of the amount that is borrowed, the term of repayments and the interest rates offered.

    Yes, our specialist bad credit lenders will still consider your application

    Yes, providing the lender is satisfied the loan is affordable to you, then you are potentially eligible. A Lender may wish to view your recent and historical bank accounts and bank statements to assess the affordability of the loan.

    You will be able to do this via the lender’s website and/or through telephone assistance.

    Our panel of lenders will require you to have a UK bank account as part of their criteria. Typically, a “door step” loan is the only type of loan made available to people who don’t have bank accounts.

    This is a loan that can be taken by people who don’t have a bank account. The name “door step” originates from the fact that the lender will meet you face-to-face and then they and/or their associates will physically come and collect re-payments from you from your property. Door step loans are usually paid out in cash.

    They are completely unregulated loans and can be an onerous form of borrowing because of very high interest rates and because many borrowers don’t enjoy the invasiveness of regular visits being made to their home for payment collection.

    This is a type of insurance by which the insurer will meet loan repayments should the borrower be unable to do so because of reasons such as sudden unemployment, illness or death. Normally applied to other types of loan, the cost of this insurance can vary quite markedly between different providers which makes shopping around the marketplace a highly advisable procedure.

    In such unfortunate circumstances, the unsecured nature of the loan and queue of more entitled creditors would mean the outstanding loan amount could be expected to be written off.

    Yes, meeting payments in a timely fashion - along with correctly servicing other financial obligations - can help build your credit rating.

    This means there is little information relating to your financial activity. It may be that you have never had a credit card, mortgage, store card or other source of credit. This can be problematic as a potential lender may struggle to judge your historical ability to make timely re-payments and therefore the lender will be less inclined to provide a loan.

    Typically, a bad credit loan may be the easiest loan product for someone with limited credit history to obtain - even though they do not actually have “bad credit” per se.

    In addition, a successful application could be expected to attract higher interest rates and a shorter re-payment term as a result of the slender or non-existent credit history.

    Yes you can, although you are advised to wait until there has been a positive change in your financial circumstances and you should also be aware that each application can leave a footprint on your credit profile which can adversely effect your credit score.

    Yes, this is something you will be able to do with an FCA-regulated loan and you will save money on interest repayments in the process.

    There are lenders on our panel who will allow this, although it does vary depending on the loan provider. You should be aware that the change in date may well be confined to the existing week or month in which you have committed to make the next payment.

    Therefore, you are not having “time-out” or a “holiday” from your loan agreement by changing the re-payment date.

    This is a breakdown the lender provides the borrower which sets out how much they have borrowed as a principal sum and how much they have to re-pay when interest and fees are applied to the principal sum.

    If you are consolidating debts (including other loans) then a bad credit loan may not be the best form of debt consolidation. Homeowner loans, Debt Consolidation Loans and Bridging loans - amongst others - may be more suitable loan products. Please visit the loanable.com page to learn more about some of these loan products - and others.

    If this happens, it’s important to inform your lender as soon as possible and then provide them with the details of the replacement card.

    This means that the lender has opted to send your debt to a third party professional company to collect your debt on their behalf. Lenders will generally only do this after repeated non-repayment, and should this occur the debt collection agency will seek to find a re-payment plan the borrower can afford.

    It is worth keep in mind that if the lender doesn’t co-operate with the debt collection agency, court orders and CCJ’S may follow.

    Yes, you can expect any late re-payment to have a negative affect on your credit score.

    This is a process by which a borrower’s failure to make loan re-payments is registered with a credit agency. Prior a default notice, a borrower can expect the lender to contact them to provide them with an opportunity to make good on their arrears.

    Wherever possible, a borrower should seek to make good on their re-payments to avoid a default notice since it has a damaging impact on the borrower’s credit rating.

    This is a procedure which authorises your bank to release to the lender your pre-agreed repayment instalments on a weekly, fortnightly or - more commonly - monthly basis.

    You should contact the lender as soon as possible to explain your circumstances. Some lenders may offer a period of grace. However, this shouldn’t be taken as a given as other lenders will apply additional interest and fees.

    A “top-up” is an additional borrowing on an existing loan. We have lenders on our panel who offer top-ups, although this varies on a lender-by-lender basis and depends on the financial circumstances of the customer in question.

    While this is very rare, there are a small number of lenders who require a face-to-face meeting before releasing funds.

    This will depend on the lender in question, but factors may include the guarantor not being a UK resident and having an insufficient credit score.

    Yes, we have lenders on our panel who will consider such prospective borrowers.

    If the loan is yet to be paid out, you may be able to change your guarantor. If the loan has already been paid out, you can expect to have to re-pay the loan in full before the loan is then re-issued in the name of the new guarantor.

    Not necessarily. The lender may be more inclined to look towards the guarantor’s credit profile, their age and their status as a UK citizen. It is perfectly possible to have a satisfactory credit history to act as guarantor without owning a home.

    I have a Potential Guarantor for a Bad Credit Guarantor Loan. However, they are worried it could adversely affect their Credit Score

    Providing the guarantor doesn’t default on a payment you have defaulted on in the first instance, then acting as a guarantor will not have an adverse effect on their credit score

    Yes, this in itself won’t work against a guarantor loan application.

    In theory, yes. Providing they are a UK citizen, of an appropriate age and have a satisfactory credit file, then they ought to be able to act as guarantor.