Payday Loans For Bad Credit

There are times when we’re all faced with a bill we didn’t expect. From a broken-down car to a packed-up boiler, everyone has experienced that sinking feeling at some point.

If this sounds familiar, you may be considering searching online for a bad credit payday loan. For those with a poor credit history, searching for a loan might be a little bit harder, but that doesn’t mean that borrowing money is impossible.

How does a bad credit payday loan work?

A bad credit payday loan is a form of borrowing designed to be a short-term solution for people with a less-than-perfect credit history. When applying for a payday loan, the customer has the option to borrow a relatively small amount of money, which is then repaid on their next pay date. Payday loans are usually offered to consumers at a higher interest rate than high street banks, for example.

Does Little Loans search for bad credit payday loans?

Little Loans do not search for payday loans, but instead what we think could be a helpful alternative. Unlike payday loans, which customers pay back in full on their next pay date, Little Loans work with a panel of lenders who offer short-term loans between £100 to £10,000, with repayment terms from 3 months up to 60 months, depending on the amount you borrow.

This means that instead of paying off your loan in one lump sum, you could pay back what you owe over a longer period of time. It’s possible that in some circumstances this arrangement could work out more expensive in the long run as you may pay more in interest; however, it could help with budgeting as you won’t have to make a substantial repayment all in one go. You must think carefully before deciding if this is the right option for you.

Can I get a payday loan with a bad credit rating?

It might be reassuring for you to know that there are many lenders in the UK willing to work with borrowers who have a less-than-perfect credit history.

Whether you can get a short-term loan will depend on the lenders on our panel. While your credit score is still important, bad credit lenders will also look at your current financial circumstances to see if your income and outgoings will comfortably allow you to repay what you owe each month.

Searching for a short-term loan using the Little Loans credit broking service could be a more convenient option as we’ll try to match you with the lender from our panel most likely to approve your application.

Will applying for a bad credit payday loan have an impact on my credit score?

All lenders in the UK authorised and regulated by the Financial Conduct Authority (FCA) are required to check that any loan offer is affordable for the applicant, and a responsible lender will want to understand your financial situation as part of the decision-making process. This is sometimes known as a hard or full credit check.

Making a full application for any credit product, such as a loan or credit card, will show on your credit report. If you make multiple applications in a short space of time this could have a negative effect on your credit score.

Little Loans use soft search technology when searching for a lender, which will not leave a mark on your credit record. Using a credit broker is a useful way to explore your options without affecting your credit score; this is one of the many reasons people looking for a bad credit loan choose Little Loans.

If we are able to match you with a lender, and you go on to complete a full application, you will then need to complete a hard credit check.

What are the possible disadvantages of a bad credit payday loan?

Bad credit payday loans are often charged at a higher rate of interest than other forms of borrowing. This is because they are designed to be used for a shorter period of time. It’s good to know that, since 2015, payday lenders are not allowed to charge more than 0.8% of the amount borrowed in interest and charges per day, and borrowers should never have to pay more than 100% of the amount borrowed in interest and fees.

One possible disadvantage of payday loans is that borrowers do not have long to pay back what they owe. This is where a short-term loan might be a more helpful option, as they can be paid back over several months, rather than all in one go.

Frequently Asked Questions

Can I get a bad credit payday loan without a guarantor?

Bad credit payday loans are specifically designed for applicants who find it difficult to borrow from more traditional lenders, such as high street banks. As such, you could be able to be approved for a bad credit loan without a guarantor.

Will a poor credit history prevent me from borrowing?

If you have a poor credit history, you may find it more difficult to access credit with the best rates and terms. Fortunately, there are UK lenders that are willing to work with borrowers who have poor or bad credit history.

Lenders who specialise in bad credit loans will look at the money you have coming in from employment or benefits. They will compare your income with what you pay out every month – your rent or mortgage, your utilities, council tax, and other essential bills. The difference between your income and your outgoings is called disposable income. Lenders will use your level of disposable income to work out if you will be able to comfortably afford any loan repayments.

If you have a poor credit history but a good level of disposable income, a bad credit lender will take this into account. Your credit history will still play a part in the decision, but this won’t be the only factor and will not automatically prevent you from borrowing.

Will my application be declined because I have a very bad credit score?

If you have a very bad credit score, it might be that there are only a limited number of lenders who are willing to consider your application. Nobody is guaranteed approval, but a bad or very bad credit score will not always prevent you from borrowing.

Can I apply for a loan with little-to-no credit history?

If you haven’t used credit much - or at all - in the past, you may find you have a low score. This is often because the credit reference agencies do not have enough information to build a picture of what type of borrower you are.

If you haven’t taken out credit before this will not necessarily prevent you from getting a loan, but it might mean that the best rates and terms are not as readily available to you. However, there are lenders who are willing to consider applicants who do not have an extensive credit history.

Does taking out a payday loan mean I have bad credit?

You do not have to have bad credit to take out a payday loan; however, as payday loans are generally designed for people who can’t access other forms of finance, they are sometimes viewed in a negative light. This means that if you apply for a mortgage in the future, the lender may have concerns about the reason why you previously applied for a payday loan.

How can I get a payday loan with poor credit without a credit broker?

If you have poor credit, it is still possible to get a loan without using a credit broker, but you may find it more convenient to use a service such as Little Loans. Instead of making many applications with multiple companies, Little Loans will search for a loan for you across a panel of lenders, which could save you time.

Because Little Loans use soft search technology to check your chances of being approved for a loan, you can check your eligibility without affecting your credit report. You will only complete a hard credit check if you are matched with a lender and go on to make a full application.

How can Little Loans help? 

Little Loans specialise in searching for a loan to suit your needs and circumstances, whatever they may be. If you have a poor credit score, we could help you find the lender most likely to approve your application, subject to status and affordability. The process on our website is designed to make it straightforward to search for a bad credit loan online.

Little Loans work with a range of UK loan companies who provide credit to people from all backgrounds, each with their own unique credit history.

How much can I borrow?

Little Loans search for loans for people with bad credit starting from £100 up to £10,000, with repayment terms ranging between 3 and 60 months, depending on the amount you borrow. How much you can borrow depends on your current financial circumstances. Remember, you should only borrow what you need and what you can comfortably afford to repay.

You can use our Eligibility Checker tool to see your chance of being accepted by one of our lenders.

How soon will I receive the money?

If successful, the money could be sent to your bank account the same day your application is approved. How long it takes to reach your account will depend on several factors, such as your bank’s policies and procedures; it may also take longer if you apply at the weekend or on a bank holiday.

How long do I have to pay back my loan?

Our panel of lenders offer a number of different repayment terms depending on the amount of money you borrow. Unlike a payday loan, where you have to repay the money you’ve borrowed in full on your next pay date, a short-term loan allows you to stretch out repayments in instalments, making your bad credit loan easier to manage.

If you need to borrow less than £1,000, you can choose a repayment period of 3, 6, or 12 months. If you apply to borrow more than £1000, our lenders may be able to provide a longer repayment period; sometimes up to 60 months on larger amounts. It’s important to remember that the longer your repayment term, the more interest you could end up paying.

What happens if I can’t afford to pay back my loan?

Before you apply for a loan, it’s important to understand your monthly repayments and how they could affect your financial situation. You should only sign a credit agreement if you are confident that you will be able to make your monthly repayments comfortably without this affecting your essential bills, such as rent or mortgage payments, and utilities.

If you are late making your monthly repayment this will be recorded on your credit report, which could affect your credit score. You may also be charged a late payment fee by your lender.

We understand that everyone’s circumstances can change, though. If you have taken out a loan and are worried that you won’t be able to make your next monthly payment, you should contact your lender as soon as you can. They will want to work with you to help you get back on track.

If you’re struggling financially, you might benefit from talking to one of the UK’s debt advice charities. Their services are free, confidential, and completely impartial.

• moneyhelper.org.uk
• National Debtline
• Citizens Advice

If you’re not sure where to start, taking the Money Health Check could be an option. Put together by StepChange, a leading debt charity, the answers you provide will signpost you to further information about accessing support.