Bad Credit History - Can I Get a Loan?

It’s probably fair to say that if you have had a history of bad credit, loan options available to you might be limited.  Most banks and building societies have fairly strict and inflexible lending criteria — even more so since the ‘credit crunch’ led to a tightening of risk attitudes and lending practices across the board.

However, it’s certainly not true that having a bad credit history necessarily means that no one will lend to you.  There are hundreds of lenders across the country who specialise in ‘bad credit loans’ for those who have had credit problems in the past.  By doing your homework and researching the market, it’s possible not only to get a loan, but to find one with the best possible rate to meet your circumstances.

Where to look

Some big high street lenders might accommodate customers with bad credit histories, but for the most part you are better looking beyond your local bank or building society.  An online search is the best way to get a feel for the loan market and the types of loans you might qualify for.

By using a search engine to look for such terms as ‘bad credit loans instant decision’ or ‘bad credit credit UK’ you will find a range of options available to you.  Some specialist lenders accept direct applications, but there can be advantages in applying through an online broker, advisory service, or price comparison site that specialises in the bad credit loan market.  They will have the experience in specifically dealing with customers with past credit problems, and will search through a number of loan providers on your behalf to identify the lender and the deal that are most suitable for your unique circumstances.

What to expect

It’s an unfortunate but unavoidable fact that most loans available to people with a bad credit history do charge a higher rate of interest than would otherwise be the case.  Lenders have to take into account the higher ‘risk’ involved in lending to customers with a history of payment arrears, and generally offset this risk by charging a higher interest rate.  Some lenders may also charge arrangement or set-up fees, but loan deals with no fees are usually also available.

Types of loans available will vary depending on the purpose and your circumstances.  Short-term ‘payday’ or ‘emergency’ loans usually have to be repaid within a month or so, and the amount charged (especially when expressed as an Annual Percentage Rate or APR) can seem very high — however this has to be balanced against the convenience of an immediate decision and same-day funds transfer, and the fact that these loans are often processed and approved without the need for a credit check.

Longer term unsecured and secured loans are also available, however you should think carefully before securing a loan against your home — if the worst comes to the worst and you aren’t able to keep up your payments, your property could be repossessed.

Overall, there are a variety of options available in the bad credit loan market, and by shopping around and taking professional advice it is possible to find the perfect solution to your cash problems.