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Loans Online – Apply for a loan online

Although many people still choose to book an appointment with their bank manager and travel down to their nearest branch to ask for a loan, more and more of us are applying online instead.

Why? The main reasons behind the shift to applying for loans online include:

  • you can apply anywhere from a connected device (depending on your ability to log onto the Internet)
  • many of the application forms to borrow money you find on finance company websites are quick and simple to fill in
  • you can apply for a personal loan day or night
  • most lenders' systems are now fully automated meaning you can get an instant decision on any application you make
  • quick payout - you could receive the money you need paid direct in your current account within minutes*

With Little Loans, you can borrow between £100 and £10,000 and pay your loan back over a period of between three months and thirty-six months.

What is the best online loan company?

Much of the new business generated by financial services company today is over the internet. Borrowers can now apply for online loans at any time of the day or night and even from their mobile phones.

However, there's no real answer to the question of which online loan company is the best. That's because every lender and borrower is different - each lender has their own preferred type of borrower they like to work with.

For example, banks, building societies, and mainstream financial institutions prefer to lend big sums of money to people with "good" or "excellent" credit ratings.

On the other hand, there are many specialist funders who only want to offer smaller loans to people with "fair", "bad", or "poor" credit scores.

As you can see, the best online loan company for one borrower is probably not going to be the best online loan for another borrower.

How do you get a loan with bad credit?

If you have a fair, bad, or poor credit rating, what are the options open to you? As you might expect, a less than perfect credit score means that the range of lenders and financial products available to you are limited.

Borrowers in these circumstances can either apply direct to a specialist lender or they can work with a specialist broker instead.

Direct lender

When you apply direct to a specialist lender, you're only going to be offered their range of financial products (subject to status).

What's more, when you complete their application form, they then have to run a hard credit search on you as part of their decision-making process.

If you're approved, that's great.

But, if you're declined, a record of that hard credit search stays on your report. Other lenders you apply to can see how many hard credit searches have been run and, if there are too many in a short space of time, your application is more likely to be declined because they might believe that you're struggling financially.

Also, too many recent hard credit searches might negatively affect your credit score.

Credit brokers

Brokers are different - they don't lend money themselves. Instead, they work with a registered panel of finance companies.

How does this work? When a lender joins a broker's panel, the broker asks the lender to define in detail what an eligible borrower is to them - questions like:

  • the personal and financial circumstances of borrowers they like to work with
  • how much they're happy to lend (minimum and maximum) and over how long 

A broker will compare the personal and financial details you've given them on their application form with the eligibility criteria provided to them by each of the lenders on their panel. The comparison itself takes just seconds because many brokers are now fully automated.

Your broker will then contact the lenders in turn where there appears to be a good match. Each lender then runs a soft credit searches on the borrower - unlike hard credit searches, soft credit searches cannot be seen by other lenders. There's also no effect on your credit score no matter how many soft searches are run.

How do lenders make a decision?

Lenders base their decision upon your personal and financial circumstances - the most important factors in deciding suitability for a loan are:

  • your credit score
  • affordability
  • employment and personal circumstances

1. Your credit score

Many lenders have a range of credit scores they'll accept when deciding whether to approve a loan. Generally, your score should fall between the minimum and maximum credit scores in that lender’s range.

2. Affordability

When you borrow money using online loans, affordability is essential. If there’s a risk that a customer won’t be able to comfortably make their monthly payments in full and on time, no lender would want to approve that application to borrow money.

Employment and personal circumstances

When you apply for an online loan, lenders prefer you to:

  • have a stable address history (if you're not already on the voters' roll, please register as it can help improve your credit score)
  • have stable employment with regular income
  • not have too much outstanding debt to other companies (for example, credit cards and overdrafts nearly always being close to or at their limit)
  • have manageable outgoings (so that there’s cash left in your bank account once you’ve paid all the bills you need to pay)

8 things a lender needs to know if I apply for an online loan

The size of your loan

You'll need to let your lender know how much you want to borrow when you apply for your loan.

To determine whether you can make the monthly payments, they'll subtract your outgoings from the level of pay you take home to see if you have enough money left over to comfortably repay the loan.

How long do you want to pay your online loan back over?

You'll be given the option of choosing how many months you want to repay your loan over - this is the "term" of your loan.

The term will affect the cost of your monthly repayments. A longer term means that your repayments are lower but that you pay more interest on your loan overall.

3. How you earn money

  • employment status (full-time, part-time, and so on)
  • your employer's name
  • your job title
  • the industry you work in
  • how long you've been with your employer
  • how often you're paid
  • your next pay day and the pay day after that, and
  • your monthly take-home pay (after tax)

4. How you spend money

Your lender will ask you about your monthly:

  • mortgage/rent payment
  • existing loan repayments
  • utility bills
  • transport costs
  • food costs
  • other expenses

5. What you want the money for

When you apply, you'll be asked for the purpose of the loan:

  • car loan
  • pay bills
  • pay off debts
  • home improvements
  • short term cash
  • other reason

6. Your address history

You'll be asked to share information about

  • the house or apartment you currently live in
  • your status (homeowner, private tenant, council tenant, or whether you're living with your family)
  • your address history for up to the last 5 years

7. How to contact you

On the application form to borrow money, you'll need to provide both your mobile phone number and your email address in case the lender needs to get in touch with you.

8. Who you bank with

When you apply for a loan, you'll be asked about your current banking arrangements including your current account number, sort code, and details of a debit card linked to your account. This is to ensure that the money you are asking to borrow is being paid into a UK bank account and also as an identity check.

What happens if my personal loan application is approved?

Most lenders are now able to provide borrowers with instant decisions on the loans they've applied for.

If your application has been accepted and approved, you'll then be shown a quote from your lender. The quote will be based upon the lender's assessment of the risk in providing you with the loan.

You’ll see:

  • the interest rate you'll be charged (the APR of your loan)
  • the size of your monthly repayments and the dates on which they'll be collected from your bank account
  • any additional charges (like late payment fees, early settlement fees, and so on) 

If you agree to both the offer and the terms and conditions by signing the online paperwork, you'll receive the money paid directly in your current account within 15 minutes*.

5 questions you should ask yourself if your loan application is approved

  • Is it really affordable? Are you absolutely sure that you'll have the money in your account to meet each repayment every month and that making the repayment won't cause you and your family hardship?
  • Do I really need to borrow this much? Could you use some of your savings to reduce the amount of money you're applying to borrow?
  • Do you want a loan because you're concerned that, without one, you won't be able to make the next lot of repayments on your other personal loans, credit cards, and borrowing facilities? If so, please do not apply for a loan – instead, contact your current lenders straight away to let them know about your current financial difficulties.
  • Is this loan expensive in comparison to finding the money from elsewhere? Does the APR on the loan seem reasonable?
  • Is this really an emergency? Do I really need to borrow money now or can it wait?

Bad credit online loans FAQ

Where can I go to borrow money fast?

If your application to borrow money is accepted by an online loans provider, you could receive the money in your bank account within minutes* of signing the online paperwork.

Are bad credit loans secured or unsecured?

This form of lending is unsecured. You do not need to offer security to a lender. Homeowners, tenants, and borrowers living with parents are welcome to apply for online loans. Because bad credit loans are unsecured, the APR on them is likely to be to be higher than secured online loans offered to borrowers with less than perfect credit histories.

Can my monthly repayments go up and down?

Your interest rate (APR) is fixed - rates remain the same for the entire period of your loan. Repayments you make to your lender will be for the amount you agreed to whe≈n you took out your loan.

Will I be charged a lender's representative APR?

The representative APR is the interest rate offered by your lender to 51% or more of their borrowers. If your loan is approved, you will be shown the rate the lender wishes to charge prior to your agreeing to accept the loan. The APR that you're offered may be lower or higher than the lender's representative APR.

Worried about your current level of debt?

If you're worried about managing your current level of debt and you'd like to speak to someone for help, you may find it useful to access the free services of one of the following debt help organisations StepChange, PayPlan, National Debtline, the Debt Advice Foundation, the Money Advice Service, and Citizens Advice.

How can I get an online loan today?

Our panel of lenders offers loans for between £100 and £10,000 to borrowers - even if they have less than perfect credit histories. If your application is approved, the money may be paid into your bank account within minutes*.

There is no charge to use our service if you choose to work with Little Loans.

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Representative Example: Amount of credit: £1200 for 18 months at £90.46 per month. Total amount repayable of £1628.28. Interest: £428.28. Interest rate: 49.9% pa (variable). 49.9% APR Representative. We’re a fully regulated and authorised credit broker and not a lender