If you are contemplating a personal loan suitable for people with bad credit, then you will have noticed that your options are rather limited.
Why banks won’t lend to people with poor credit histories
Conventional banks tend to be wary of lending to people with less-than-ideal credit ratings. The main reason for this is a question of risk. It stands to reason that people with poor credit histories are riskier to lend to that people with strong credit histories. As a result, many conventional banks prefer to offer their products only to those with good credit scores.
Another reason for the lending reticence from banks is the looming aftermath of the global financial crisis of 2007/8. This period, which has been dubbed The Great Recession, was partly caused by incautious lending habits to “sub prime” borrowers. These were borrowers on low incomes and (usually) with poor credit scores. Banks are keen to avoid this kind of issue again, so lending regulations are tight.
So does this mean you’re stuck? You need to borrow money, but the banks won’t provide you with loans due to your poor credit history? If you find yourself wondering this, then don’t worry. You do have options, and we at Bonsai Finance are specialists in helping you find them. Below, you’ll find a list of 10 companies who are willing to offer loans, bad credit applicants accepted. When you compare loans with our service, we will take into account the offerings from many of the following…
1) Aspire Money
Aspire Money offer personal loans for bad credit with a decent amount of flexibility. The amounts available are nicely variable; you can borrow between £500 and £25,000 with this well-respected provider. The terms are also flexible, with repayment times ranging from one to five years.
The downside is the the representative APR, which is fixed at 49.9%.
2) Progressive Money
The loans available from Progressive Money are promising options for people with bad credit, but they do have a downside: you have to be a homeowner to qualify (though the loans are not secured against your property). If you are a homeowner, it’s well worth considering this lender. Loan amounts vary from £1,000 to £15,000, and can be paid over terms between 18 months and 15 years.
The representative APR, however, is steep at 50.13%. This is, however, variable.
3) UK Credit
Using a guarantor is a good way to access a loan if you have poor credit, and UK Credit make finding a suitable guarantor all the simpler with one of their flagship products. Someone can act as a guarantor for you on loans between £1,000 and £6,000, even if they are not a homeowner. This is rare, and makes UK Credit well worth considering.
As ever, the downside is the representative APR, which is 59.9% (fixed).
4) Everyday Loans
Everyday Loans offer simple personal loans to people with bad credit. You can borrow between £1,000 and £15,000, and you can take anything between two to five years to pay this back. There’s no fees or charges, and you don’t need a guarantor.
Sadly, this flexibility has a price; the representative APR is 79.4%, though this is variable.
Sunny offer what they term as “fast flexible loans”, which makes them more of a payday loan provider than a standard lender. However, if you’re in need of fast funds, then they may be a choice worth considering. You can borrow between £100 and £2,500 and repayment timescales vary.
The downside is that, as with most payday loans, the representative APR is an eye-watering 1,291%. However, it’s worth remembering that 1291% is the representative APR if you borrow over a year; most Sunny loans will complete far sooner than this.
JustUs offer a simple personal loan for people with bad credit. You can borrow between £2,000 and £15,000, and the loan terms are a fairly-standard two to five years.
Most impressively, JustUs loans are available at a representative APR of 13.9%. However, as you may expect with such a low APR, the qualifying threshold may be higher, so you may wish to avoid this lender if your credit score is particularly poor.
7) 1st Stop Homeowner Plus
1st Stop offer loans to homeowners only, though the loan is not secured against your property. The necessity to be a homeowner aside, these loans are fairly standard. You can borrow between £2,000 and £15,000, and repayment can be between two and six years.
The representative APR is fairly attractive too, at just 18.5%. However, it is worth noting you may be subject to an arrangement fee; this is collected along with your standard monthly repayments.
8) Citrus Loans Personal Loan
Citrus Loans are fairly standard, though they are a broker rather than a company that provides loan funds themselves. Nevertheless, it’s worth considering Citrus Loans when looking for loans suitable for those with bad credit. You can borrow between £1,500 and £25,000, and the repayment terms vary between 12 months and five years.
The representative APR is just 18.9%, which is fairly decent when compared to other loans in this sector.
Cashfloat primarily provide small loans for a short period, so they are more of a payday loan company than a long-term provider. However, they can be beneficial if you’re in a tight financial spot. You can borrow between £200 and £1100, and repayment terms vary.
However, as you might expect, the representative APR is a startling 997%.
10) 118 118 Money
Finally, 118118 Money offer a range of loan-term personal loans for bad credit that are worth considering. There are no arrangement fees to pay, no charges for overpayments, and a relatively reasonable representative APR of just 35.9%.
There are a few requirements you will need to meet, however. You cannot have CCJs, defaults, or high levels of unsecured debts. You must also have a net monthly income of over £700, and you must hold a bank or building society account in the UK.
So while it may sometimes be frustrating finding a lender when you have bad credit, it is possible, thanks to specialist lenders such as those featured above. And remember: if you want to search the loans, bad credit acceptable, that are currently on the market, you can do that right here at Bonsai Finance. With our powerful and comprehensive search tool, you could be matched with the right lender for you in a matter of minutes.