The Complete Unsecured, Bad Credit Loans Guide:
Unsecured Loans for Poor Credit Explained What Are Bad Credit Loans?
Bad credit loans are a great option for those with a poor credit score or little to no credit history, who would otherwise struggle to obtain a loan.
Approval is dependent on additional factors such as your ability to afford and repay the loan, and doesn't focus as heavily on your credit score as other loan options might. Thanks to this, a much wider range of applicants are able to qualify quickly and easily!
At Flexy Finance we offer fast & affordable unsecured loans for bad credit and we work with direct lenders only. You can apply simply online, receive a decision within 15 minutes and access up to £5,000 the very same day!
How Can Unsecured Loans for Bad Credit Help You?
- Has your car broken down? Do you need to repair it as soon as possible?
- Perhaps your family pet needs urgent veterinary treatment?
- Maybe you’re looking to consolidate all of your debts into one, easy to manage loan?
Whatever your situation, if you don’t have the spare cash to cover the cost or the perfect credit history required to obtain a standard loan, unsecured personal loans for poor credit are a fantastic solution.
You don't need to provide any collateral to qualify. This type of finance is also known as an unsecured loan, which means you don’t need to offer any of your valuable possessions as security for the loan and your vehicle and home are always safe!
Checklist To Qualify:
- All applicants must be aged 18 or above to be accepted
- You must be a UK resident
- You’ll need to have your own UK bank account and debit card
How Does The Process Work? Getting Unsecured Personal Loans With Bad Credit from Direct Lenders
Loans for those with a poor credit history are super simple to obtain. In this section we outline every step of the process, from making an application to actually receiving the money, so that you can see for yourself just how efficient and effective bad credit loans are.
Watch Our Video & See How It Works
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Step 1 - Apply Online
Applying for bad credit loans is easy. There are no phone calls necessary - simply fill out a short, online form at a time which suits you best. Apply from the comfort of your own home, or on the go using your mobile.
There are absolutely no application fees. Loan amounts range from £100 - £5,000 and you can choose to spread the cost over a flexible repayment period of 1 – 24 months.
Top Tip: Ensure that the lender you're considering is registered with the Financial Conduct Authority before making an application. All reputable and trustworthy financial institutions are authorised by the FCA. Find us on their register here.
Step 2 - Receive A Decision
Having submitted an application, we will search the best unsecured bad credit loans direct lenders on the market, to find you a deal that best suits your personal situation and budget. Most applicants are successfully matched within just seconds of submitting an application and will receive an instant online decision!
Step 3 - Provide Supporting Documentation
Dependent upon the loan provider you are matched with, you may need to submit additional documentation to verify the information given in your application. The most common supporting evidence requested includes:
- Proof of UK citizenship. This could include a copy of your British passport or an original copy of your birth certificate.
- Proof of income – bank statements, payslips etc.
- Proof of address – utility bills and/or a copy of your tenancy agreement
Where additional evidence is requested, approval will likely be given in principle, with a final decision confirmed once the lender has received the requested documentation. Remember – loans for people with bad credit are approved subject to affordability, not your credit score, so it is far easier to qualify!
Why Choose Us? Our service is super quick and simple to use. You’ll never be left waiting for a decision and you can rest assured that the loan deal you receive is specifically suited to your situation.
Step 4 - Receive the money
Finally, once the loan agreement is finalised, the lender will begin to transfer the money direct to your account. You could even receive the money the very same day!
Getting Approved Can You Qualify For Very Bad Credit Loans?
Yes. While it can be more difficult for an individual with a bad credit history to be accepted for a regular loan, unsecured loans for poor credit are a lot easier to obtain.
We like to say YES, when others say NO.
Of course, you still need to meet the basic criteria to qualify and there are several things which you can do to increase your chances of being accepted. Lucky for you, we've taken the time to outline a few simple, but effective, ways you can improve your eligibility below.
Improving Your Eligibility:
1. Are You Employed - Do You Have an Income?
Approval is subject to affordability, not just your credit score. So, having a consistent and good level of income will help to counteract the fact that you have bad credit and improve your chances of qualifying for the loan.
Why? It demonstrates to the lender that you can easily afford repayments and reduces the risk of non-payment. Lenders will assess whether you are a good candidate for finance by calculating a debt-to-income ratio. Evidence of a good income will always improve that ratio and in turn, your eligibility for the loan.
Caution: You should expect that lenders will request proof of income, including bank statements and tax returns, so never be tempted to lie about how much you earn on your application.
2. Could You Borrow A Smaller Amount?
While this may not be your preferred choice, if you are worried about qualifying, you may want to consider borrowing a smaller amount of money. With small loans, the amount that you pay back each month is also smaller. Ultimately, you don't need a large income to cover small repayments, so you are far more likely to guarantee the lender's approval.
3. Can You Provide a Guarantor?
It is by no means essential to have a guarantor – you can still qualify for bad credit loans without a co-signer! However, having one, could improve your chances of being accepted and help you to obtain a considerably lower interest rate.
A guarantor acts as a means of security for the lender, in case you find yourself unable to pay back the loan. For instance, if you fail to keep up with repayments, the financial responsibility will fall to your co-signer to make repayments for you.
Ultimately, the additional security that comes with a guarantor means that a lender is far more likely to grant you either a larger loan amount or a lower interest rate.
Top Tip: Before applying for a loan, you can check your eligibility using soft search results. This way, you avoid damaging your credit score, but still receive a clear indication of whether or not you will be accepted for the loan. Do this for free here.
4. Refrain From Submitting Multiple Applications
While you don’t need a stellar credit history to qualify for bad credit loans, anything you can do to avoid damaging your credit score further will stand in your favour when it comes to being approved. Think of it as damage limitation.
So, do not make several different applications for a loan at the same time in the hope that this will improve your chances of being accepted. If a lender sees that you have recently been rejected by multiple different loan providers, it can deter them from granting you a loan.
Is It Right For You? The Pros & Cons of Unsecured Personal Loans for Bad Credit
Whether your predicament is due to missed utility payments, a regrettable accumulation of debt or simply a thin credit file, bad credit loans can provide you with the emergency finance you require.
That being said, it is always important to consider both the benefits and drawbacks of any financial product together, before making a final decision as to whether it's suitable for you.
What Are The Benefits?
- They’re Unsecured
A great benefit of bad credit loans is that your personal property won’t be at risk should you default on repayments. As the loan is entirely unsecured, you don’t need to offer any of your valuable assets as collateral for the loan.
In other words, the lender cannot claim your home or other high value items, such as your car or jewellery, if you find yourself unable to make repayments. Obviously, you will still be responsible for making timely and consistent repayments but knowing that your home is safe will dramatically minimise financial stress!
- Applying for Unsecured Loans with Bad Credit in the UK Is Quick And Simple
You are able to apply for a loan within minutes, all from the comfort of your own home. There are no calls or paperwork involved, and there is absolutely no application fee!
In comparison to applying for a loan from a bank or building society, online loan applications are significantly less hassle. Simply complete a two minute, online form and you're done.
Why Choose Us? We use 256 bit encryption to ensure that our client’s application details remain safe and secure at all times. Rest assured that we will never pass on your information to third parties without your permission.
- High Approval Rates
One of the best things about bad credit loans is that they boast particularly high approval rates. Approval is granted dependent upon your ability to afford repayments, not your credit rating, so a wide range of applicants are able to qualify.
Better still, you can receive a decision within as little as 10 minutes and you’ll never be left waiting to find out if you’ve been accepted!
- Personalised Repayments
Paying back a personal loan with bad credit is hassle-free and affordable. You can choose to spread the cost of your loan over a comfortable period of 1 – 24 months in easy to manage, monthly instalments.
The amount that you repay each month is always agreed upfront with the lender before any cash is exchanged, so you’ll never encounter any costly surprises!
Expert Advice: Always ensure that you can comfortably afford loan repayments before making an application, to avoid encountering any costly surprises further down the line. To do this, we advise using a free, online repayment calculator.
What Are The Drawbacks?
- Loan Amounts Can Be Smaller
Providing that you're not looking to receive a large amount of money for the purchase of real estate for example, this simply won’t affect you!
Loan applicants with poor credit present themselves as a higher-risk investment for the lender. To counteract this risk, loan providers limit the amount which is granted to you, hence the amount that you allowed to borrow is restricted to £100 to £5,000.
Some lenders will impose additional fees, such as late repayment charges, so you should always check and discuss any fees directly with the lender before signing for a loan.
- Potentially Higher Interest Rates
As previously mentioned, personal loans for bad credit are high-risk investments for direct lenders. As the loan is not backed by collateral (i.e. valuable personal property) if the borrower fails to repay, the lender would simply lose the money and receive nothing in return.
Because this is a potential reality, lenders can charge higher interest rates to justify the risk. The exact interest rate you will be charged will depend on:
- How poor your credit score is
- The amount you want to borrow
- Your income
Understanding Poor Credit Why Might You Have A Bad Credit History?
Have you defaulted on loan or credit card repayments in the past? Maybe you’ve accumulated a large amount of outstanding debt? Or perhaps you’ve made the mistake of making lots of applications for credit all at once? Crucially, these are all factors which could negatively affect your credit rating.
There are several things you can do to better understand your credit history and improve your overall rating for the future. So, in this section we’ll give you all the information you need to really get to grips with your credit file.
What Exactly Is A Credit Score?
Your credit score helps lending companies to determine whether you are a reliable or risky borrower. In other words, by looking at your previous credit history a loan provider can reach a fair judgement as to how likely you are to repay the loan amount.
If you have a strong history of consistently repaying your debts on time, it is likely that you will have a high credit score, and the lender will accept your application for a loan. On the other hand, if you have defaulted on repayments in the past, your credit score may have suffered as a result. In this case, it is likely that any future applications you make for a loan or credit may be rejected.
You can find quick and easy tips on how to improve your credit score here.
What Is A Thin Credit File?
Having a ‘thin credit file’ means that you are yet to build up a substantial credit history. This is usually because you haven’t taken out a loan or credit in the past, so there is no history of you having repaid any debts.
This can result in a low credit score and may cause a loan provider to reject your application. With no record to support that you can be relied upon to consistently make repayments, you become a riskier investment than someone who has proved that they can repay a loan in the past.
Will Bad Credit Affect Your Application for A Loan?
If you need a little extra cash, but you’ve found yourself with a poor credit score, please do not worry! Bad credit loans from Flexy Finance are available to an extensive range of individuals and will allow you to borrow the money you need as quickly and affordably as possible.
Other loan options, especially those offered by traditional financial institutions such as banks, focus solely on assessing your credit file to determine whether your application should be accepted. However with a poor credit loan, approval is subject to several additional factors, such as:
- Your income
- Your personal situation
- How much you are requesting to borrow
- Your ability to actually afford and repay the loan
So, getting approved isn’t exclusively dependent upon your credit history and a much wider range of applicants are successfully accepted for this type of financial product!
FAQS Frequently Asked Questions
Quick answers to the most popular questions regarding loans for poor credit:
How much can you borrow?
Unsecured loans for poor credit allow you to access amounts ranging from £100 to £5,000.
What do you need to qualify?
- You need to live in the UK
- You must be 18 years old minimum
- You’ll need a UK bank account
How do you repay?
First, select a repayment period which best suits your individual needs. You can choose to repay over a period of 1 – 24 months.
Next, agree on an affordable, monthly repayment amount with the lender. The repayment amount will then be fixed for the duration of the repayment period, so you will always know exactly what is expected of you and you can budget accordingly.
To get a representative example of the amount you will need to repay, visit Money Saving Expert’s loan repayment calculator.
If you default on repayments, what happens?
Bad credit loans are unsecured, which ultimately means that if you default on repayments the lender will not be able to recoup for their losses by taking ownership of your valuable personal possessions, such as your home or vehicle.
However, this is not to say that defaulting on repayments won’t have repercussions – some lenders will charge late fees. Also, if you fail to make repayments for a sustained period of time, as with any loan, the debt will be passed on to a debt collection agency.
How quickly can you receive a bad credit loan?
Same day loans are available for those with poor credit history, so you could receive the loan amount in as little as 24 hours!