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Small Loans for Bad Credit

Looking for a small loan but worried you won't be accepted because you have a bad credit history? Did you know that there are over 80 specialist bad credit loan companies in the UK?

Little Loans works with many established and reputable bad credit finance providers and, on this page, we look at the options that might be available to you if you need to borrow money (£100 to £5,000).

How can I get a small loan with bad credit?

So, which companies actually do approve small loans for bad credit applicants? There are two types of company which, subject to status, are very happy to work with applicants who have low credit scores:

Can I get an emergency loan with bad credit?

Loans are subject to status. While your financial history is still very important to companies offering loans for bad credit applicants, they also consider your current personal and financial situation when deciding on whether to approve your application.

Can I get a loan with a credit score of 500?

That really depends. 500 credit score is considered "bad" at Experian and "excellent" at Equifax. However, as we just mentioned, your credit score is just one factor a bad credit lender uses when they’re making their mind up on whether to approve your request for a loan.

Are small loans known by any other name?

You might hear "small loans" referred to by a number of different names.

For small loans where you only have to make one repayment, they are often called bad credit payday loans. With a bad credit payday loan, you have a limited time to repay what you borrowed plus the interest on top - normally no more than 35 days.

With a payday loan, you have to repay the lending in full all in one go - the original sum of money you borrowed plus the interest on top.

For small loans which you pay back in monthly instalments, some finance companies refer to these as "short term credit loans".

If you take out a short-term credit loan for between £100 and £1,000, you can pay it back in either three, six, or twelve months. If you choose a short-term loan between £1,001 and £5,000, you have between three months and three years to pay it back.

Many borrowers now choose a short-term loan which they can pay back over months rather than a payday loan.

Why? Borrowers compare the size of the one-time repayment they'd make on a payday loan with the size of the monthly repayments they'd make on a small loan for bad credit.

The monthly repayments on small loans for bad credit are likely to be much cheaper although, in most cases, a borrower will pay more interest overall than they would on a payday loan.

Do Little Loans do small loans?

Yes. Little Loans is a broker and we work with a panel of bad credit lenders who specialise in offering credit to borrowers with less than perfect financial histories.

Do the lenders you work with check my credit rating?

Yes. Little Loans is a broker and we work with a panel of bad credit lenders who specialise in offering credit to borrowers with less than perfect financial histories.

Do the lenders you work with check my credit rating?

Yes. When deciding whether to approve your personal bad credit loan, a finance company reviews your current credit history and credit rating. The lenders we contact on your behalf use:

  • a soft credit check to assess the likelihood of your being approved (no effect on your credit rating or credit history)
  • hard credit checks when you make a full application for a loan (too many hard checks in a short space of time will negatively affect your credit rating/credit history)

Find out how and when your credit rating is used in our process below...

How does your loan application process work?

Applying for a small loan with Little Loans is easy and quick. All you have to do is answer a few simple questions - it should take you no more than two minutes and we manage the whole process for you.

The lenders we work with do not require you to provide a reference and you do not need to find a guarantor - all loans offered are unsecured loans.

Step 1 (2-3 minutes)

First, complete the Little Loans online form. What will we ask you? We’ll ask you about:

  • The money you earn every month (the line of business you work in, your job title, how long you’ve been with your current employer, how often you’re paid, when your next day pay is, and so on)
  • The money you spend every month (mortgage/rent payments, existing loan repayments, utility bills (gas and electricity), transport costs, food costs, and so on)
  • Your address history
  • Bank current account number and sort code

Step 2 (a few seconds)

How do we know which finance companies to approach on your behalf?

Whenever we accept a new lender onto our panel, we ask them about the types of borrowers they like to work with and the types of loans they prefer to approve. We then match you to the lenders most likely to say “yes” to your application by using the information you provide us with when you apply.

We get in touch with each of the lenders we've identified in turn. The lenders we contact then run a soft credit check on you.

We then re-direct you to the website of the first lender who responds to us positively indicating that they'd like to receive a full application from you.

Step 3 (2-3 minutes)

When you're at the lender's website, you'll need to answer the questions they have for you on their application form (which incorporates their affordability assessment).

Once you've done that and submitted your answers, the lender will then run a hard credit search on you. Within a few seconds, they'll get back to you with an answer on your short-term bad credit loan request.

Step 4 - review your offer

What do you need to consider about a lender’s offer if your loan for bad credit applicants is approved? The most important question might be “have you been offered the amount that you want?”

If you haven't but you could top up the amount you've been offered with any savings or cash from somewhere else to meet your emergency bill, would this still make more financial sense for you?

If you answer "yes" or if you've been approved for the full amount, what else do you need to look out for?

Interest rates

Another important question to ask yourself is about the interest rate on your loan.

The interest rate you're offered determines how expensive your loan is going to be overall. The higher the rate, the higher the monthly payments you'll have to pay to your lender.

Are the monthly repayments on offer affordable? If you think that meeting those payments would be difficult and have the potential to cause you hardship, you should not accept the offer.

Little Loans tip - you will often see APR (short for annual percentage rate) on lenders' websites. All lenders must show their representative APR on their website - that's the APR that 51% or more of its borrowers are charged. If your loan is approved, you may be offered an APR at a higher or lower rate than the representative rate.

Charges

The third question to consider about your loan offer is your exposure to any potential additional charges.

There may be three other types of charges you have to pay in addition to the interest on your loan. They are:

  • late payment fee - a charge for failing to have the money in your account on the day you agreed that the lender could collect it. Not all lenders levy this fee.
  • early repayment fee - a charge for paying off your loan early in an attempt to save money on interest. Some lenders (but not all) levy a fee if you do this. The fee is normally equivalent to a proportion of the interest that would have been charged had the loan run to term.
  • broker fee - some brokers charge you a fee for using their service. Little Loans does not charge any of our borrowers a fee regardless of whether your application has been successful or not or whether you choose to accept an offer made by a lender on our panel.

The third question to consider about your loan offer is your exposure to any potential additional charges.

There may be three other types of charges you have to pay in addition to the interest on your loan. They are:

  • late payment fee - a charge for failing to have the money in your account on the day you agreed that the lender could collect it. Not all lenders levy this fee.
  • early repayment fee - a charge for paying off your loan early in an attempt to save money on interest. Some lenders (but not all) levy a fee if you do this. The fee is normally equivalent to a proportion of the interest that would have been charged had the loan run to term.
  • broker fee - some brokers charge you a fee for using their service. Little Loans does not charge any of our borrowers a fee regardless of whether your application has been successful or not or whether you choose to accept an offer made by a lender on our panel.

Step 5 - your loan is sent to your account within minutes

If you are happy with the interest, the fees, and you're certain that you can comfortably meet the monthly repayments, let the lender know that you'd like to proceed.

They will then show you their terms and conditions for the loan. Please read and understand them because, if you do take out the loan you've been offered, these terms and conditions will govern a new and legally binding credit contract between you and your lender.

If you still decide that you want to go ahead after reading the terms and conditions, small loans are generally sent direct to your bank account on the same day - often within minutes*.

Warning late repayment

If you default on your small loan, you may not be able to access other forms of credit for years to come. If you are concerned about the level of debt you are currently responsible for, you may wish to consider asking for help and advice from one of the following organisations - StepChange, PayPlan, National Debtline, the Debt Advice Foundation, the Money Advice Service, and Citizens Advice.

Applying for bad credit loans

Apply now for a decision in minutes via the secure and online Little Loans credit application form. Borrow between £100 and £5,000 - no security or guarantor required to apply.

Our services are designed to help poor credit applicants find the cash that they require (subject to status) and who need their loan sent direct into their bank account within minutes.

You are under no obligation to accept any poor credit loan offered.

For your peace of mind, Little Loans is authorised and regulated by the Financial Conduct Authority.

Check out our 4.8 star rating on Feefo

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Straight forward

“Easy pleasant service, quick decision and easy account management.”

Laurissa Marsden

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