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How to get a Loan with Bad Credit

Find out how to get a bank loan with bad credit and the types of bad credit loans available, as well as the pros and cons of them.
An upset man with poor credit.

Getting a loan with bad credit might seem impossible but it’s not. Some lenders specialise in bad credit loans. So even if you have a bad credit history, it might still be possible for you to get a loan. A loan can help you to buy a house, pay for a holiday or even just pave the way until payday. But if you’ve had trouble with loan repayments in the past, you might find yourself being declined for credit.

We tell you how to borrow money with bad credit.

What are Bad Credit Loans?

A bad credit loan, or poor credit loan, is a type of loan specifically designed for people with a poor credit rating. When a lender decides whether to lend to you, they normally look at your credit history and if you have a poor credit history, they’ll likely turn you down. However, some lenders offer loans for bad credit, specifically.

If you have a poor credit history, it’s worth going straight to a specialist lender for a bad credit loan because if you apply for a regular personal loan and are declined, it will be recorded on your credit file. Meaning it could be even harder to get a loan and could even be declined for a bad credit loan.

Loans for bad credit typically have higher interest rates as lenders are taking a higher risk lending to you. But getting a loan when you have a low credit score can be challenging, so if you want a loan, you might have to accept the higher interest rate offered.

How to get a Bank Loan with Bad Credit

If you have a bank account with a specific bank, you might want to apply for a loan with them. Unfortunately, being with the bank you have applied for a loan with doesn’t mean you’ll definitely be accepted for a personal loan, but you can up your chances by improving your credit score.

How to improve your credit score:

  • Make sure all the information on your credit file is correct, and inform your credit reference agency if they're any mistakes.
  • Register to vote - being on the electoral roll confirms your address and shows lenders you're credible.
  • If you have limited or no credit history, build your credit score by taking out a credit card.
  • Ensure you're meeting all minimum payments on your current credit agreements every month.
Improve your credit score

For more tips on how to improve your credit score, please see our guide to improving your credit score.

Types of Bad Credit Loans

Secured loans for bad credit

A secured loan is a type of loan that is secured by an asset, like a home or vehicle. Securing an asset to a loan means if you can’t afford your monthly repayments, you may be required to sell that asset, or release equity on it, to meet your repayments.

If you have a bad credit history, you may be more likely to be accepted for a secured loan than an unsecured loan, but you need to decide if you’d be willing to give up that asset if you were unable to meet the repayments.

A man and a woman holding a guarantor loan document.

Guarantor loans for bad credit

Guarantor loans are a type of loan, where you have a guarantor in place in case you can’t afford your loan repayments. A guarantor agrees to pay your monthly repayments if you can no longer afford to. Your guarantor will undergo a credit check, the same as the main applicant, so they would need a good credit history to be accepted.

If you’re worried about a bad credit score, you might want to consider a guarantor loan.

Unsecured loans for bad credit

It is unlikely that unsecured loans would be available for people with very bad credit. This is because lenders will view you as a high-risk borrower, as a low credit score could mean that you’ve missed payments in the past or have a lack of credit history.

What are the pros and cons of Bad Credit Loans?

Like with all loans, there are pros and cons to consider before applying.

Pros of a bad credit loan:

  • You're more likely to be accepted because the lender promotes the fact that they consider all credit histories
  • Quick, online applications
  • More options for loans

Applying for a bad credit loan could mean you have more options for how much you can borrow. Lenders might be reluctant to lend you large amounts if you have a bad credit rating, so going to a specialist bad credit loan lender could be a way to borrow a larger sum of money.

Cons of a bad credit loan:

  • Higher interest rate than your average loan
  • They could have a long repayment period

A longer repayment period might sound like a good thing – a long repayment term normally means paying less each month. But with bad credit loans, if the interest rate is very high then you’ll be paying more overall with a longer repayment term.

What is a good Credit Score?

A good credit score is dependent on the credit reference agency a lender goes with. There are three main credit reference agencies in the UK, and they all use different scoring systems.

  1. Experian - any score over 881 is considered good.
  2. Equifax - any score over 420 is considered good.
  3. TransUnion - any score over 604 is considered good.

Although it’s lower with Equifax than Experian to have a good credit score, it doesn’t mean it’s easier to get a good credit score with one credit reference agency over another. They all score you using the same factors, and your score will accurately depict your credit history (if all the information is correct).

I have a good credit history, why am I being declined credit?

You may be declined credit, despite having a good credit score because the lenders are taking other factors into account. Just your credit score alone isn’t always enough to get you a loan. Lenders look at several aspects when considering an application.

Other aspects a lender will look at:

  • Your employment history
  • Your current annual income
  • How long you've lived at your current address
Inside tip:

Some lenders will even look at how long you’ve had the same mobile phone number, as keeping the same number for a long time shows stability and financial credibility.

An advisor sitting in front of a credit score dial.


If you’re looking for a loan for bad credit, it is important to do your research and find creditors that are willing to lend to people with poor credit histories.

Here at Consolidation Express, we might be able to help. We offer debt consolidation loans and consider all credit scores.

A debt consolidation loan can help you to pool your debts together, so you make just one monthly repayment. Often it means you can reduce your monthly repayment, leaving you with more money left over at the end of the month for things you enjoy.

Our online application is a soft credit check, so you don’t need to worry about damaging your credit score when you apply online with us.

Please note: We are a broker, not a lender.

Apply for a Loan Now
An advisor pointing to a screen displaying Rep APR.

APRs from 5.8% to 89.9%

We are a broker, not a lender.

Unsecured Loan Representative 69.9% APR

Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.

Secured Representative 11.7% APR

If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.

Further reading

What are the Different Kinds of Unsecured Loans?

Understand what an unsecured loan is, and how best to use the different kinds of unsecured loans in 2023.

What are the Different Types of Secured Loans?

With so many different types of loans available, it can be difficult to know which is right for you. For more information on secured loans, read this expert article.

Persistent Debt – What Does it Mean for Your Credit?

Persistent debt can affect your credit rating for a significant time period. Read to find out more.