Bad credit loans
Compare loans for those with bad credit
- Having a poor credit history doesn’t always mean you can’t find a loan. Check your eligibility without affecting your credit score
- Search for a bad credit loan to suit you, before you apply
- Enter your details and compare loans from our trusted providers
What are bad credit loans?
Bad credit loans are for those with a poor credit score or no credit history. They could also be an option for you to consider if you’re struggling to get a standard loan.
Loans for bad credit usually have higher interest rates. They’re also likely to include other restrictions, such as a limit on how much you can borrow and for how long.
However, if you have a poor credit history but successfully pay off a bad credit loan on time with regular payments, you could improve your credit score. And this could mean you’re more likely to be accepted for a loan or another type of credit in future.
What our expert says...
“Provided you can make the repayments, taking out a loan when you have bad credit can help repair or improve your credit score. But be sure you need the loan and that you can afford the repayments for the entire term.”
- The Editorial Team, Experts in personal finance, insurance and utilities
What types of loan for bad credit are available?
While your options may be reduced, there are several types of bad credit loans to consider:
Personal loan
If you don’t have a valuable asset – a house, for example – to use as security, then one option is an unsecured personal loan for bad credit. This allows you to borrow money at a fixed interest rate and pay it back over an agreed length of time in instalments.
But if you have a bad credit score, your application is more likely to be declined. And you may pay a higher interest rate than someone with a good credit score.
Secured loan
If you’ve been refused an unsecured personal loan in the past, you might be more successful applying for a secured loan. Secured loans are guaranteed against a valuable asset such as your house, which acts as security to the lender.
Be aware, though, that if you can’t meet your repayments, your home could be repossessed.
Guarantor loan
A guarantor loan involves a friend or relative agreeing to repay the loan if you can’t. While this could give you access to a loan that you wouldn’t otherwise be eligible for, you could end up shifting your debt onto someone close to you if you can’t meet your payments.
Please note that you can’t compare guarantor loans with Compare the Market.
What should I consider before I apply for bad credit loans?
Applying for a loan is a big decision that shouldn’t be taken lightly. This is especially the case if you have other debts. But if you think a poor credit loan could be right for you, here are the most important points to consider:
- The amount you borrow – even with small loans for bad credit, you need to be confident you’ll be able to meet your repayments. The more you borrow, the more you’ll need to pay back.
- How long you take to repay – this is known as the term. Borrowing over a longer period will normally lower your monthly repayments. But you can end up paying more overall when you include the extra interest.
- The interest rate – lower interest rates are often reserved for longer terms or higher borrowing amounts, and for those with a good credit score.
- What you can afford to repay each month – this will be unique to your financial situation. Make a budget and work out what you can reasonably afford to repay.
- Additional fees – these could include a late payment penalty, or an early repayment charge (ERC) if you want to pay off your loan early.
Use our loan calculator to get a better idea of how much your loan could cost overall and how much your monthly payments might be.
How much can I borrow with a personal loan for bad credit?
It will depend on your personal circumstances and the lender.
At Compare the Market, you can compare personal loans of £1,000 to £50,000 and secured loans of £10,000 to £150,000, depending on your personal circumstances. But personal loans specifically targeted at those with bad credit often have much stricter lending limits.
When deciding how much you can borrow, lenders will look at:
- Your income and everyday spending
- Your credit score
- How much debt you have
- Why you want the loan
- If you’re securing the loan against an asset.
You can use our loan calculator to see how different loan terms and rates can affect the cost of a bad credit loan.
Try our loan calculatorHow to get a loan with bad credit
Here are four key steps to take if you’re going to apply for a loan with bad credit:
- Check your credit report – knowing your credit score could help you better understand how lenders will look at you. You can check your credit report for free. If you find a mistake, contact the credit provider and ask them to correct it. Sorting out any errors on your credit report could improve your credit score.
- Only borrow what you need and can comfortably afford to repay – try to borrow as small a sum as possible. Lenders will be reluctant to loan large sums to anyone they view as high risk.
- Consider the type of loan you apply for – if you’re hoping to borrow a large amount, you may have a better chance of being accepted for a secured loan. Securing the loan against a valuable asset, such as your property, could ease the lender’s concerns. But it’s a greater risk for you because your home could be repossessed if you don’t keep up with repayments.
- Use a loans eligibility checker – our loan eligibility checker can help you find loans that you’re likely to be accepted for without affecting your credit score.
What’s the easiest loan to get with bad credit?
If you’re a homeowner and hoping to borrow a larger amount, a secured loan could be easier to get. Securing the loan against your home reduces the risk to lenders.
Remember you risk having your home repossessed if you can’t keep up with your repayments.
If you’ve been refused a personal loan, you could consider applying for a guarantor loan. You’ll need to find a friend or family member with a good credit history to act as ‘security’ for the loan. They’ll be responsible for paying the loan balance in full if you’re unable to.
Please note that you can’t compare guarantor loans with Compare the Market.
Why choose Compare the Market for bad credit loans?
Use our free eligibility checker to view personalised results
No impact on your credit score when using our eligibility checker
We search for loans from a range of leading providers
Over 90,000 customers rated us on average 4.9 out of 5
As of July 8th 2025, Compare the Market had an average rating of 4.9 out of 5 from 93,668 people who left a review on Trustpilot. The score 4.9 corresponds to the Star Label ‘Excellent’. Learn more about our rating
Am I eligible for a personal loan for bad credit?
Eligibility criteria can vary among lenders but, in general, to be eligible for a bad credit loan, you must:
- Be a UK resident
- Be at least 18 years old
- Have a UK bank or building society current account.
When you apply for a loan, the lender will run a hard credit check to take a more in-depth look at your credit history. They’ll also want to see proof of your income and employment status. This is because they want to be sure you’re able to repay the loan.
To find out how likely you are to be accepted for a bad credit loan, use our loan eligibility checker. It’s a soft search, so it won’t have any impact your credit score.
Compare the Market Limited acts as a credit broker, not a lender. To apply you must be a UK resident and aged 18 or over. Credit is subject to status and eligibility.
What borrowing limits and interest rates do loans for bad credit offer?
Interest rates for bad credit loans tend to be higher than average rates for other loans. This is because you’re considered to be a higher risk.
To get an idea of loan rates, here’s an example:
| Loan amount | £2,000 |
|---|---|
| Representative APR (annual percentage rate)1 | 40% |
| Loan term | 36 months |
| Monthly repayment amount | £89.48 |
| Total interest | £1,221.37 |
| Total cost of loan | £3,221.37 |
1This is just a representative example. The figures are for illustrative purposes only. Credit is subject to status and eligibility.
The amount you can borrow with a bad credit loan will vary between lenders.
Some may have restrictions on how much they’re willing to lend over a set period of time. For example, you might be able to borrow £2,000 over one to three years but not stretch it out over 10 years.
Try our eligibility checkerWhat are the alternatives to bad credit loans?
Before applying for a bad credit loan, you might want to consider these options:
- A credit-building credit card aimed at those with poor (or no) credit history. It typically has a low credit limit but if you make your repayments on time, and stay within your credit limit, you’ll show you can be trusted with managing debt. In the long run, this could improve your credit score.
- An arranged overdraft for a short-term cash crisis. Several banks offer interest-free overdraft buffers, which let you go overdrawn by a small amount without paying interest. You’ll need to talk to your bank about what could be possible.
- Borrowing from family or friends to help you out of a financial hole. It’s a sensible idea to draw up a loan agreement to avoid potential fallouts further down the line.
- Peer-to-peer (P2P) loans – it might be possible to find a bad credit loan online through a P2P lending site. But it’s unlikely you’ll get a low interest rate without a good credit rating.
- Debt advice – a debt adviser could help you work out a suitable budget and payment plan for your debts. They might even be able to negotiate with lenders and creditors on your behalf.
- Remortgage your home – if you have equity in your property, you might be able to remortgage and release cash to pay off existing debts. However, your monthly mortgage payments could rise considerably and leave you paying more interest overall.
What do I need to apply for bad credit loans?
Use our online eligibility checker to find out which bad credit loans you might be eligible for without impacting your credit score. Once you’ve decided to apply for a loan, you’ll need to provide:
- All the addresses you’ve lived at in the past three years
- Your email address
- Your employer’s details, including their address and phone number
- Details of your monthly income and outgoings
- Your bank or building society account details
- Information about any County Court Judgments (CCJs) or bankruptcy.
Your chosen lender will then run a hard credit check on you. This will be marked on your credit report. Once they’ve carried out their credit and affordability checks, they’ll either approve or reject your loan application.
Depending on the type of loan you’re applying for, there may be further requirements. For example, a secured loan will require further details about the asset you’re using as security.
With a guarantor loan, the lender will check the financial situation of your chosen guarantor who, if approved, will need to sign a legal contract.
How can I improve my credit score?
Here are five ways you can help boost your credit score, which could increase your likelihood of being approved for a loan:
- Check your credit report – check the information it holds about you is accurate and up to date. If you spot something that’s wrong, ask the lender or credit reference agency – Experian, Equifax or TransUnion – to correct it.
- Put your name on the electoral register – loan providers use the electoral register to confirm your identity and address. It’s a key element in building your credit score.
- Try not to spend above 25% of your credit limit – if you spend a lot more than a quarter of the available credit on your card and end up close to your limit, it can hit your credit score.
- Repay on time – be consistent and make your monthly repayments on time. Set up a direct debit to reduce the risk of missing payments.
- Make sure your name appears on bills – if you share a home, get your name on one or more of the utility bills. This can help your credit score, as long as you pay them on time.
Compare bad credit loans
Although bad credit loans aim to provide financial help for those with a poor credit history, you may qualify for other personal loans even if you have a less-than-glowing credit report. If you compare loans with us, we’ll only show you those that you’re likely to be accepted for – without affecting your credit score.
Start comparing loansFrequently asked questions
Why do I have a bad credit score?
Your credit score could be low if you have:
- Failed to stick to a credit agreement
- Made late repayments or missed repayments
- Been declared bankrupt
- Have a CCJ registered against you
- Entered into an Individual Voluntary Arrangement (IVA)
- Financial links (such as a joint bank account or mortgage) to someone with poor credit
- Multiple loan applications on your credit record over a short space of time. This can suggest to lenders that you’ve having financial difficulties
- Never borrowed money before.
Thankfully, a poor credit score isn’t set in stone. Although it can take time, there are ways to build your credit score and improve your chances of borrowing at better rates in the future.
What counts as a bad credit score?
Each of the three main UK credit reference agencies have a different score for what they consider to be bad credit:
- Experian: 720 or below (out of 999)[2]
- Equifax: 438 or below (out of 1,000)[2]
- TransUnion: 660 or below (out of 850)[2]
It’s worth getting a free credit check from each of the main agencies to make sure the information they have on you is correct.
[2] Accurate as of February 2025.
Can I get a loan with an IVA?
It can sometimes be possible to get a loan while you have an IVA. But you’ll need to get approval from the insolvency practitioner (IP) supervising the arrangement if you want to borrow more than £500.
An IVA is a legally binding contract between you and your creditors to pay back your debts over an agreed period. Many lenders consider it too risky to lend to someone in an IVA. And lenders who do offer a loan will likely charge high interest rates.
It’s often not a good idea to take on new debt when you’re in an IVA. Your IP can advise you on how to get your finances back on track.
You can also get free and impartial advice on managing debt from charities such as National Debtline and StepChange.
Can I get a guaranteed loan for bad credit?
Guaranteed loans don’t exist in the UK, regardless of your credit history. The Financial Conduct Authority (FCA) requires all lenders to perform credit and affordability checks before a loan is approved. This is to make sure that you can afford to repay what you owe.
You can use our loan eligibility checker to see which loans you’re likely to be accepted for, without any impact on your credit score. Please note that acceptance isn’t guaranteed though.
What if I get refused a bad credit loan?
If you’ve been refused a bad credit loan, it’s important to find out why. You can then make any necessary changes before applying again.
It’s usually a good idea to wait a while before you apply for another loan. Too many credit applications in a short amount of time can be a red flag to lenders. If you can, take the time to get your finances and credit score in a better shape.
Before you apply for another loan, it’s a good idea to find out which loans for bad credit you’re likely to be eligible for. This is where our loan eligibility checker can help.
Why have I been rejected for a loan in the past?
There are several reasons why you may have been rejected for a loan:
- You have too many loans, maxed-out credit cards and other debts
- You have a bad credit rating because of a history of missed or late payments
- You have no credit history because you’ve never borrowed money before
- You don’t have a steady job with a regular income
- You don’t earn enough to comfortably afford the loan repayments
- You don’t own a house or a car to put up as security against a secured loan
- There are mistakes and inconsistencies on your application form.
Understanding why you were rejected for a loan can help you make the necessary changes to improve your chances of being accepted in the future.
Can I apply for a loan without affecting my credit score?
When you submit a full application for a loan, it will leave a hard search on your credit file. This could have a negative impact on your credit score when you first take out the loan.
But if you manage your loan responsibly and prove you’re a reliable borrower, this could help build your score.
You can check your eligibility for a loan before you make a full application without affecting your credit score. Our loan eligibility checker will show you which loans you’re most likely to be accepted for, with no negative impact on your credit score.
What is a soft search?
A soft search is a way of looking for loans or credit cards without affecting your credit score.
Soft searches will still appear on your credit file, but lenders won’t be able to see them. That means it won’t affect their decision to approve or reject any credit applications you make.
