Do you want to borrow £4,000 but you're worried whether your application will be approved or not because of a poor credit score?
There are lenders happy to approve loans of £4,000 to bad credit applicants (subject to status) so how do you go about applying for one?
You should only apply for a £4000 loan from a lender or a broker authorised and regulated by the Financial Conduct Authority (FCA).
Lenders have an obligation to ensure that consumers are able to afford the loan they are applying for as set by the rules set by the FCA. One of the ways to do this is through a credit check. Anyone offering a loan without performing a credit check are not likely to be authorised by the FCA. You can verify an authorised company on the FCA register
There are four registered main credit reference agencies (CRA) in the UK - Equifax, Experian, TransUnion, and Crediva.
Your credit history is a record of your financial transactions including who you bank with and which companies you currently have existing loans and credit cards with.
Each of the four CRAs produces a credit rating (sometimes called a credit score) for each person in the UK - your credit rating is expressed as a number.
Although your score is not the only factor lenders use when deciding whether to approve a loan application from you or not, you can consider it a general rule of thumb that:
20 years ago, bad credit customers had few or no financial products they could apply for other than using a pawnbroker or cheque cashing shop. Options open for bad credit borrowers for access to finance has improved greatly since.
Soft credit searches are used by finance companies to assess whether you're likely to be accepted for one of their loans or not. Soft credit searches can only be seen by you on your credit file and they don't affect your credit score.
Hard credit searches are used by lenders when you make a full application for credit with them. All other lenders can see hard credit searches on your report.
If there are a lot of hard credit searches on your credit file in a short space of time, then:
When people apply direct to a lender, their application is only considered by that one lender. Unfortunately, finance companies don't provide you with a guide on their website telling you the type of borrowers they like to work with.
As a result, you may end up applying for a loan from a lender whose eligibility requirements you won't meet – that’s a waste of time and energy for you. For every full application you make, a hard credit search will be run.
Brokers work with a registered panel of lenders and their job is to introduce suitable borrowers to them.
Brokers do know what the eligibility requirements are for each of their lenders. So, when you apply via a broker, they'll only approach in turn the funders on their panel who would be more likely to say "yes" to you based upon your current financial and personal circumstances.
Each lender approached carries out a soft credit search on you - soft credit searches don't damage your credit score. You'll then be re-directed to the website of the first lender who responds positively to the approach we make on your behalf.
After your broker has sent you to the website of their finance partners, you'll then need to complete that lender's application form. Please have the following information to hand:
When you submit your details to the lender, they are required by the Financial Conduct Authority at this point to run a hard credit search on you.
Applicants receive a quick decision from a lender following the hard credit search - the entire process is automated meaning you can apply at any time of the day or night.
Eligibility for loans is subject to status and based upon a lender's assessment of your ability to repay the loan and the information contained on your credit report.
If the lender has accepted your request, they will then make you an offer. On your screen, you'll be presented with a quote showing you the cost of your new credit facility and any associated fees.
You'll see the interest rate your lender wants to charge you for your loan. The rate may differ from the representative APR displayed on your lender's website. The higher the interest rate, the higher each monthly repayment you make will be.
You may also have to pay a management fee if you miss a repayment date and an early repayment charge if you settle your loan in full early.
Little Loans tip - should you use an online loan calculator to work out if you can afford a £4000 personal loan? While they are useful, it's important to remember that you will only know the true cost of a personal loan following a full application to a lender.
These £4,000 personal loans are unsecured. Secured loans for £4000 are available on the market however you are at risk of losing your home if you do not keep up repayments on any loan secured on your property.
If you're happy to proceed, please read and understand the lender's terms and conditions. If you agree to them, sign the online form and a new lending agreement will be created. You should then receive the money in your bank account within minutes*.
Please remember to only accept the offer of a loan if you can comfortably afford the fixed monthly repayments.
If you're happy to proceed with the loan you've been offered and you have read, understood, and you accept the terms and conditions, let your lender know that you want to go ahead.
Payments are taken from your bank account once a month on an agreed date by direct debit or continuous payment authority.
If, at any point during the term of the loan, you think you'll have trouble making your next payment, please contact your lender without delay and let them know.
If you're worried about your ability to manage your credit level of debt, please do not make any further applications for personal loans. You may benefit from contacting one of the following registered debt support organisations - StepChange, PayPlan, National Debtline, the Debt Advice Foundation, the Money Advice Service, and Citizens Advice.
By using Little Loans’ service, of course. Our service is simple and quick. What are the four main reasons why you should apply for a 4000 loan through Little Loans?
You can apply any time of the day or night. Our service is all online - no need to wait
To start your application, please complete the form on this page. Please note that we cannot guarantee to find a lender for every borrower.
Representative example: Amount of credit: £1000 for 12 months at £123.40 per month. Total amount repayable of £1,480.77 Interest: £480.77. Interest rate: 79.5% pa (fixed). 79.5% APR Representative. We’re a fully regulated and authorised credit broker and not a lender