Small loans are cash loans designed for people who have a poor credit rating and who need to borrow money to cover an unexpected financial emergency. On this page, we'll share with you everything you need to know about small personal loans and how to apply for one even if you have a bad credit score.
Small loans are available to borrowers for amounts of between £100 and £5,000.
For loans of £1,000 or less, borrowers can repay over a period of three months, six months, or twelve months. For loans of £1,001 or more, borrowers can choose to repay over a period of time between three months and thirty-six months.
Small loans, sometimes called short-term loans, are offered by lenders to borrowers who need access to cash in a hurry.
The typical reasons why a borrower would apply for a small loan include:
Please remember that small loans are an expensive form of borrowing and that you should only consider applying for this type of finance if you're unable to secure the money you need from another source.
Before applying for a small loan, you may wish to consider:
There are various different types of borrowing you might want to consider including:
What is the cheapest way to borrow money? It really does depend on your personal circumstances.
So, it is always a good idea to make sure that, before you commit to anything, you examine and compare each available option open to you to discover which type of loan offers the very best deal for you.
You can apply for a small loan either:
When you approach one of the many finance companies on the market which offer small loans for bad credit borrowers, they'll assess your eligibility based upon a number of different factors.
If you’ve had financial problems in the past, you'll understand that the choice of lenders open to you will be limited compared to someone who has a higher credit score.
Please understand though that all loan approvals are subject to status and we cannot guarantee to find you a lender.
We're a broker and not a lender. We have a panel of lenders and, for each lender we work with, we know the types of loans the lenders like to make and the types of customer they like to work with.
Just below, we explain exactly how we work and how what we do benefits borrowers looking for small loans in a hurry to cover a financial emergency or to meet an unexpected bill.
Our application process is all online. And because it's online and it's automated, you may receive an offer for the amount you need in just a few minutes from now (subject to status).
Once we have all this information, we then get to work.
There is an affordability assessment included on your application form. What finance companies want to find out when you apply is something called your "disposable income" - that's how much money you've got at the end of the month after all your bills are paid.
When you apply, we'll ask you to share details with us about how much you earn, how often you're paid, and your monthly take home income after tax.
We'll also ask you for details on how much you pay per month on any existing loan repayments, your utility bills, your transport costs, your food costs, and your other monthly expenses.
Let's say that we work out your monthly disposable income is £500.
If you want to take out a loan whose monthly repayments are really close to that £500 amount, some finance companies might say "no" because:
Lenders want to see as big a difference as possible between your disposable income and the size of the repayments on the small loan you want to take out.
Although this is certainly not the only factor, they use to make a decision on a small loan application, "disposable income" is very important to lenders.
We'll contact each lender in turn on our panel where we believe the details you've provided us with about yourself means there might be a strong match between you and what a lender's preferred type of borrower is.
Each lender we contact will run a soft credit check on you. Only you can see soft credit checks on your credit report, and they have no effect at all on your credit score.
When the first lender gets back to us and they indicate that they may approve your request if you apply to them, we'll automatically re-direct you to their website. Please note that we cannot always find a lender for every borrower who applies with us.
When you're at the lender's site, please complete their online application in full. Once you've done that, a hard credit search will be run on you.
You should get the decision on your application for a small loan from the selected lender within minutes.
You may be offered:
Please remember that, because lenders offer small loans to customers with bad credit scores, there is a higher rate of default on these types of loans.
To cover losses on these loans, a small loan provider charges higher interest rates which may seem quite expensive compared to loans you might be offered by a high street bank, for example.
You should look for four things on your lender's offer before you decide whether it’s right and manageable for you:
Before you accept your lender's offer, please carefully read and understand the terms and conditions of the small loan you're agreeing to.
When you click or press the button to accept the offer, you will enter into a legally binding agreement with your lender which will be governed by those terms and conditions.
If you are happy to proceed, let the lender know by accepting the offer. You should then receive the money in your bank account within minutes*.
Your credit score may improve if you manage your small loans account well after you've received the money from the finance company.
If you are concerned about the level of debt you're managing, it may be better to talk to someone about it before you increase your indebtedness further by taking out a small loan. You may benefit by speaking to a professional free of charge in one of the following debt help organisations - StepChange, PayPlan, National Debtline, the Debt Advice Foundation, the Money Advice Service, and Citizens Advice.
Our secure, online applications process is easy to use, and you won't have to wait around to find out whether you've been approved for a loan or not.
We charge borrowers no fee and there's no obligation to take out any offer made to you by one of our lenders.
For your peace of mind, we are authorised and regulated by the Financial Conduct Authority (FCA).
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