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Short Term Loans for Bad Credit

There are times when we’re all faced with unexpected expenses, for instance getting a car back on the road or buying a replacement for that all important household item. Short term loans can be a flexible solution for when the going gets tough, even if you struggle with bad credit.

At Little Loans we don’t believe that financial mistakes made in the past should prevent you from finding credit today. We work with a panel of UK lenders who provide loans that cater for people from all walks of life and with credit scores at all levels, so getting a short term loan for bad credit doesn’t have to be so problematic.

To give you a better idea of what short term loans for bad credit are all about, we’ve answered some common questions asked by borrowers.

What are short term loans?

Many forms of borrowing, such as mortgages and PCP car finance loans, stretch out over a considerable period and are often for large sums of money. The opposite is true of short term loans, however, which enable applicants to quickly borrow a smaller amount of money to be repaid over a matter of months.

Short term loans are often viewed as a useful solution to unplanned costs such as a car repair bill or an invoice for essential home maintenance. Whilst we would all like to be able to buy the items we need outright, this isn’t always a realistic option and being able to stretch costs over a longer period of time can really help with managing your personal finances.

What are bad credit loans?

Bad credit loans are a short term lending solution for people who have a lower credit score or poor financial history.

There are lots of factors that can influence your credit score including missing repayments for past credit, being subject to a County Court Judgment (CCJ), or defaulting on a loan. Some more traditional lenders are quick to decline any application made by a potential borrower who has a poor credit history and so it can be difficult for anybody who has struggled with their finances to get approved for a loan.

Fortunately, many modern lenders are willing to assess applications based on more than just a borrower’s credit score. What matters most is whether the loan you are applying for is genuinely affordable based on your current financial circumstances.

Will I need a credit check to get a short term loan?

Yes. The Financial Conduct Authority (FCA) requires all lenders to conduct credit checks on potential borrowers before they can offer them a loan. This is because without as lenders are required to assess affordability by law.

Borrowers should be cautious of any company that claims to offer no credit check loans or ‘guaranteed loans’, as they are unlikely to be trading lawfully and may not be subject to the usual rules and regulations put in place by the FCA to protect consumers.

How does having a bad credit rating affect how much I can borrow?

It’s no secret that a bad credit score can set you back when it comes to borrowing money, particularly from more traditional lenders. To understand why, it’s necessary to know a little bit about how credit ratings work.

Banks and credit providers use an array of information to work out your credit score, which helps them to determine whether they are willing to lend to you and on what terms. There are lots of factors that can affect your credit score, but chief among these is your payment history. Lenders view payment history with such importance because it gives them an overview of how a borrower has managed their credit in the past.

If you’ve missed a payment or worse still defaulted on a loan, credit providers may be cautious of agreeing to lend to you at all. Even if they feel that you meet their criteria, they may decide to offer you a lesser amount and at a higher rate of interest to make up for the risk in lending to somebody with less a than consistent history of repaying loans.

How does having a bad credit rating affect how much I can borrow?

It’s no secret that a bad credit score can set you back when it comes to borrowing money, particularly from more traditional lenders. To understand why, it’s necessary to know a little bit about how credit ratings work.

Banks and credit providers use an array of information to work out your credit score, which helps them to determine whether they are willing to lend to you and on what terms. There are lots of factors that can affect your credit score, but chief among these is your payment history. Lenders view payment history with such importance because it gives them an overview of how a borrower has managed their credit in the past.

If you’ve missed a payment or worse still defaulted on a loan, credit providers may be cautious of agreeing to lend to you at all. Even if they feel that you meet their criteria, they may decide to offer you a lesser amount and at a higher rate of interest to make up for the risk in lending to somebody with less a than consistent history of repaying loans.

How can I get a short term loan with bad credit?

If you’re grappling with bad credit, it can be a daunting process to apply for a quick loan. There are numerous options available to potential bad credit borrowers, but the two most common approaches are applying to a direct lender for a quick loan and applying via an online credit broker.

Applying directly to a lender for a short term bad credit loan

One of the more obvious ways to apply for a loan is to go directly to a lender. The UK lending market is full of companies offering all manner of fast, short term loans with differing rates and repayment terms to suit borrowers.

Many lenders provide potential borrowers with the opportunity to apply for a short term loan online and will often pay the money into your account on the same day. For a lender to offer loans in the UK they must be authorised and regulated by the Financial Conduct Authority (FCA), so it’s worth double checking that a direct lender displays this information before you begin your application.

Using an online credit broker to apply for a short term bad credit loan

With so many direct lenders available, it’s hard to know where to start when it comes to applying for a short term loan with bad credit. For borrowers who don’t have a go-to lender, or for those who want to shop around, an online credit broker can be the ideal solution to finding a loan that meets your needs.

Whilst many lenders deal only in their on financial products, credit brokers work with a panel of lenders to match borrowers with a loan that works for them. At Little Loans, the lenders that we work with offer flexible short term credit solutions to people with bad credit scores and a variety of other financial issues. We are not a lender and none of our processes will affect your credit report.

Our website hosts a quick eligibility calculator, which can give you an instant indication of whether you are likely to qualify for a short term loan without impacting your credit score. This can be particularly useful for bad credit applicants, who may be concerned about applying directly to a lender only to have their application rejected – potentially damaging their credit score further

You can then choose to complete our simple online application form, which involves a soft credit check to help us determine which lender from our panel is most likely to approve your loan. A hard credit check will only be carried out if you make the decision to complete a full application with a lender from our panel – and this may affect your credit score. If your application is successful, the cash can be paid into your bank account in just minutes*.

I need advice on my debts. Who can I speak to?

If you are struggling financially, it is important to consider how taking out further loans may impact you. If you are concerned about coping with increasing levels of debt and financial commitments the organisations listed below can provide you with free and impartial advice.

moneyadviceservice.org.uk

stepchange.org

nationaldebtline.org

*Once approved, your cash could be sent within minutes. The time that it takes for the cash to be received in your account will depend on your bank’s policies and procedures, along with the total sum borrowed.

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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