Thinking of getting a loan but perhaps you have a poor credit history. Well you’re in luck, there are loan providers out there who consider people with poor credit. We’ll help you find out which loans could be easy to get and how to compare them.
So having bad credit history doesn’t necessarily mean you can’t get a loan. As you’ll see on our price page, we list providers who consider applicants with poor credit.
These personal loans are based on your personal circumstances – how much money you earn each month and your regular monthly outgoings. They’re also known as an unsecured loan, because you don’t have to set them off against a possession such as your home (those are called homeowner or secured loans).
A personal loan or a credit building credit card?
A credit card is based on a type of borrowing called revolving credit – but don’t be put off by the jargon. It basically means that there’s a maximum amount you can borrow, say £1,000.
It’s entirely up to you when and if you spend that money, but if you use the full amount there’s no more available until you’ve paid off some of the debt. These are better used in the short-term, and paid back as soon as possible. If not they can prove an expensive way to borrow. There are credit cards that consider applicants with a poor credit history, which are designed to help build up your credit score over time.
A personal loan could be a less expensive option compared to the interest on a credit card if you’ve got a balance you’ve not paid off, if you're looking to borrow a lump sum over a set period of time, and particularly if you want to borrow a large amount.
You’ll often find that loans become cheaper the more you borrow – or at least the interest rates do. But of course the amount you repay will still be more than you borrow. Personal loans usually cover amounts from £1000 to £25,000 but make sure you compare your options as these will vary.
What is a credit check and does it affect my borrowing?
A credit check or credit report is used by lenders to find out about your credit history. Your credit history, alongside other criteria, is used by lenders when making decisions on whether to lend to you.
In short, yes, your rating does affect your borrowing potential. It will impact both the amount you can borrow and the terms of your loan, like the interest rate.
Some credit check information is provided by you, like your address and financial information (bank details etc.) Credit reference agencies then supply any records of late payments and/or missed payments, as well as flag up if you’ve had any county court judgments.
Something else to be aware of is that your credit history will often show if you’ve applied for loans, regardless of whether you were accepted. This can influence the decision and so is another good reason to thoroughly compare your options before actually applying.
Important things to consider before committing to a personal loan
APR (Annual Percentage Rate) is the total amount the loan will cost you on top of the amount borrowed, including interest and charges. The APR advertised is representative, which means it’s just an example of what 51% of successful applicants will be given but everyone else may end up with a higher rate.
Early Repayment Penalties are charged by some lenders if you try to pay back the loan earlier than initially agreed.
Even with easy to get loans, making every payment on time is really important. If you fall behind in making repayments, or stop paying whatever the reason, your provider could take legal action.
Compare, compare, compare
It's really easy to compare loans before actually applying for them. Use our loan comparison page to help you. Try searching by either how much you want to borrow or by the maximum you can afford to repay each month. Add in the length of time you want to repay over and… voilà!
You’ll get a table showing the options available – it’s as easy as that. These include poor credit loans – lenders who will provide loans for poor credit history.
Do remember that a loan is an expensive way to get money and not without risk if you fail to meet the terms agreed. Think carefully whether the loan is essential and look into all of your options before taking that step. We're here to help take the headache out of doing the homework.
The other good thing about buying with comparethemarket.com is MEERKAT MOVIES – that means you can take a friend to the cinema with 2 for 1 cinema tickets. You can use them on Tuesdays or Wednesdays at participating cinemas every week for a year. Or if the flicks aren’t your thing, you can still get your hands on a meerkat toy instead, it’s totally up to you.*