If you’ve been turned down for a loan with a bank because you have bad credit, it might still be possible to get the cash you need. The key is to learn how to get a loan with bad credit and which lenders will let you still borrow money.
Why don’t banks lend to people with bad credit?
When a person applies to borrow money from a bank, the bank’s credit assessor checks that person’s credit score. A person’s credit score provides some insight into their past financial history, so the bank can see who is likely to keep up with their repayments and who is more likely to default and miss payments.
For example, someone with a high credit score above 800 obviously has a strong history of making all their repayments on time and taking their financial obligations and responsibilities seriously.
By comparison, a person with a bad credit score may have struggled with some financial difficulties in the past. As a result of those difficulties, they may have missed some payments or filed for bankruptcy.
If a person with a low credit score applies for a bank loan, it’s likely most lenders will decline the credit. Fortunately, there are some lenders willing to offer loans to people with less than perfect credit.
What is a bad credit loan?
Bad credit loans are usually set up as short-term payday loans, so you’re expected to repay the amount you borrow quickly. When assessing your application, a bad credit lender will check your credit score. Your score is considered ‘bad’ if it falls between 300 and 579.
What else do the lenders check?
Along with checking your credit score, lenders will also want to check some other criteria, including:
– You are a UK resident
– You have a regular source of income
– You have a debit card attached to your bank account
– You have a valid mobile phone number
– You have an email address
Even though you’re asked to submit a valid mobile phone number, our panel of bad credit lenders won’t call you. Instead, your information will be verified online.
How do I apply for a bad credit loan?
The process for applying for your loan is quick and easy. Simply enter the amount of money you want to borrow and the period of time you want to repay your debt over.
The online calculator will work out how much your monthly repayments will be. If you can afford to keep up with your repayments, you can proceed to enter in your personal details.
All of your personal information is kept secure and remains strictly confidential at all times.
You can find more information about the application process by viewing how it works.
How fast can I get the cash?
If your loan application is submitted and approved before 3 pm on weekdays, it’s possible to get your cash paid into your bank account on the same day. However, if your application is submitted later in the day or the approval takes a bit longer, the cash may arrive the following day.
Does a bad credit loan affect my credit score?
As with any other type of credit, applying for a bad credit loan can affect your credit score. If you make all your repayments on time, the lender will report the activity, which could reflect positively on your score.
However, if you fall behind on your payments or don’t make payments at all, the lender will also report the lack of financial responsibility. Not only will your credit score be negatively affected, but you could also incur penalty fees and late payment fees that increase the amount you owe.
It’s also important to remember that your credit score may also be impacted if your file shows lots of credit checks in a short amount of time.