Loans for Bad Credit – Top 25 Direct Loan Lenders for Poor Credit in UK (2025)

Last Updated on October 7, 2024

Bad credit is often a barrier to securing traditional loans, but it doesn’t mean you’re out of options. In the UK, many lenders cater specifically to borrowers with poor credit scores.

If you’re planning to explore loans for bad credit in 2025, this guide will help you navigate your choices and find the best lenders offering favorable terms.

What Are Loans for Bad Credit?

How Do Bad Credit Loans Work in the UK?

Loans for bad credit are designed for people with a less-than-perfect credit history. In the UK, traditional lenders, such as banks, usually reject loan applications from borrowers with poor credit scores.

However, bad credit lenders use alternative criteria to assess applicants. These lenders may consider factors like your current income, employment status, and overall ability to repay rather than focusing solely on your credit score.

For example, instead of relying on a score of 600 or above, bad credit lenders might look at whether you’ve had stable income for the past few months, even if your score is as low as 400.

These loans come with higher interest rates because of the perceived risk, but they provide an essential option for those in need.

Why Consider a Loan for Bad Credit?

You may consider a loan for horrible credit in situations where you have urgent financial needs, but your poor credit score is preventing you from accessing traditional loans. These loans can be useful in covering emergency expenses, such as:

• Car repairs or purchasing a new vehicle.
• Medical bills not covered by the NHS.
• Consolidating high-interest debt from credit cards or other sources.

Additionally, bad credit loans can help rebuild your credit score. If you make payments on time, your credit score can improve, which may increase your access to better financial products in the future.

How Can I Get a Loan With Really Bad Credit?

What Are My Options for Very Poor Credit Scores?

Even with very poor credit, you can still find a lender willing to offer a loan. The two most common types of loans available are:

1. Secured loans, where you provide an asset (like your home or car) as collateral.
2. Guarantor loans, where a friend or family member with good credit co-signs the loan.

With these options, lenders are more likely to approve your application since there is less risk on their side. Secured loans usually come with lower interest rates but carry the risk of losing your collateral if you cannot repay.

Guarantor loans, on the other hand, rely on the good credit history of your co-signer to guarantee the loan.

Can I Borrow Money With a Terrible Credit Score?

Yes, you can borrow money with a terrible credit score, but it may come with strict conditions such as:

• Higher interest rates: This compensates for the risk lenders take on when lending to someone with bad credit.
• Lower loan amounts: Lenders might cap the amount you can borrow.
• Shorter repayment terms: You may be required to repay the loan in a shorter period.

Although these conditions aren’t ideal, bad credit loans are often one of the only solutions available for borrowers with a terrible credit score.

Can I Get a Loan With a Credit Score of 400?

What Lenders Accept a Credit Score of 400?

A credit score of 400 is considered very low, but there are still options available. Some UK lenders that offer loans to borrowers with such low credit scores include:

• Amigo Loans: Known for offering guarantor loans with flexible eligibility criteria.
• Everyday Loans: Offers personal loans to individuals with low credit scores, often looking at income rather than just credit history.

These lenders may not look only at your credit score but also your overall financial health. It’s crucial to check the terms carefully, as the interest rates may be considerably higher than traditional loans.

What’s the Minimum Credit Score to Get a Loan?

The minimum credit score needed to qualify for a loan varies by lender. For example:

• Traditional bank loans typically require a score of 600 or above.
• Specialized bad credit lenders may approve loans for credit scores as low as 300-400, especially if you’re applying for a secured or guarantor loan.

Additionally, secured loans generally have fewer credit score requirements than unsecured loans, as the lender has the assurance of collateral.

What Are the Best Loan Types for Bad Credit in 2025?

Secured vs. Unsecured Loans for Bad Credit

When choosing between secured and unsecured loans, it’s essential to understand the differences:

• Secured loans require collateral (e.g., your house or car), which can reduce the lender’s risk and often results in lower interest rates. However, if you default, you risk losing your asset.
• Unsecured loans don’t require collateral but come with higher interest rates because the lender takes on more risk. Unsecured loans are more common, but they are harder to get with poor credit.

What Are the Different Types of Loans Available for Bad Credit in the UK?

There are several loan options for those with bad credit in the UK, including:

1. Guarantor Loans: A third party guarantees the loan, which reduces risk for the lender.
2. Payday Loans: Short-term, high-interest loans meant for small amounts.
3. Secured Loans: Loans backed by collateral.
4. Personal Loans: Longer-term loans with higher borrowing limits.

Each loan type has different eligibility requirements and terms, so it’s essential to assess which option fits your situation best.

Payday Loans vs. Personal Loans for Bad Credit

Payday loans offer quick cash but come with extremely high interest rates (sometimes over 1000% APR). They are meant for short-term borrowing and can trap borrowers in a cycle of debt if not repaid promptly.

Personal loans, on the other hand, offer longer repayment periods and usually have more reasonable interest rates. If you can qualify, a personal loan is often a better choice than a payday loan for managing long-term financial needs.

What Are the Pros and Cons of Bad Credit Loans?

The Advantages of Bad Credit Loans

• Quick Access to Funds: Many bad credit lenders offer fast approvals and same-day access to funds, which can be vital in emergencies.
• Flexible Eligibility Criteria: Bad credit loans are tailored to people with low credit scores, making it easier to qualify compared to traditional loans.

The Drawbacks of Bad Credit Loans

• High Interest Rates: Loans for bad credit tend to come with much higher interest rates, which means you’ll end up paying back significantly more than you borrowed.
• Risk of Further Debt: If you fail to make timely repayments, you could find yourself in deeper financial trouble, possibly worsening your credit score further.

How Can I Apply for a Bad Credit Loan in the UK?

Step-by-Step Guide to Applying

1. Research lenders: Compare the best bad credit loan options available.
2. Check your eligibility: Ensure you meet the lender’s criteria, including income requirements.
3. Prepare necessary documents: This typically includes proof of ID, proof of income, and possibly proof of residence.
4. Submit your application: Complete the application form, either online or in person.
5. Review loan offers: Upon approval, carefully review the loan terms before signing.

What Should I Look for When Applying for a Loan?

When applying for a bad credit loan, pay attention to:

• Interest rates: Compare APRs to find the most affordable loan.
• Repayment terms: Consider whether you can comfortably meet the monthly repayments.
• Fees: Look out for additional fees such as application, origination, or early repayment penalties.
• Lender reputation: Always check customer reviews and ratings for the lender.

What Are the Factors to Consider in Bad Credit Loans?

Interest Rates and Repayment Terms

Interest rates for bad credit loans can be very high, often exceeding 30%. The repayment terms also vary, with some loans requiring repayment within a few months, while others offer terms stretching over several years.

Carefully consider both of these factors to ensure you’re getting a loan that’s affordable over the long term.

Loan Amounts and Lender Reputation

Always borrow only what you need. Some lenders may offer higher loan amounts than necessary, tempting you to take on more debt. Additionally, it’s crucial to choose a lender with a good reputation, ensuring that the loan terms are transparent and fair.

What Are the Risks of Bad Credit Loans?

How High Interest Rates Affect Borrowers

High interest rates significantly increase the overall cost of borrowing. For example, a £1,000 loan at a 50% APR could result in paying back over £1,500. If you miss payments, the interest can compound, putting you in a worse financial situation than before.

What Happens If I Miss Payments?

Missing payments can lead to several negative consequences:

• Increased fees and penalties: Lenders may charge late fees, further increasing the loan’s cost.
• Credit score damage: Your credit score could worsen, making it harder to borrow in the future.
• Legal action or asset seizure: For secured loans, failing to repay could lead to the loss of your collateral.

Top 25 Direct Loan Lenders for Bad Credit in the UK (2025)

1. Everyday Loans – Best for Flexible Personal Loans

Everyday Loans is a direct lender that caters specifically to people with poor credit by offering personal loans.

They are unique in that they conduct face-to-face meetings with applicants to assess your financial situation holistically, rather than just focusing on your credit score. This human touch helps them offer loans to people who may not qualify with other lenders.

• Loan Amount: £1,000 – £15,000
• Interest Rate: 39.9% APR (varies based on circumstances)
• Features: Flexible repayment terms up to 5 years, face-to-face consultation, no guarantor required.
• Pros: Everyday Loans allows bad credit borrowers to access larger loan amounts, and they prioritize your current financial health over past credit issues. Repayment terms are flexible, and you can manage monthly payments more comfortably.

2. Tesco Loans – Best for Low Interest Rates

Tesco Loans provides competitive rates even for people with less-than-perfect credit. They offer larger personal loans at relatively low interest rates, depending on your financial status. Tesco is known for its transparency and flexibility.

• Loan Amount: £1,000 – £35,000
• Interest Rate: Starting from 2.9% APR (may go higher for bad credit borrowers)
• Features: Fixed interest rates, no fees for early repayment, flexible loan terms from 1 to 10 years.
• Pros: Tesco Loans provides one of the lowest interest rates for larger loan amounts, making it ideal for debt consolidation or home improvements. The no-fee early repayment feature is helpful for borrowers looking to reduce interest payments.

3. Finio Loans – Best for Instant Decisions

Finio Loans focuses on speed and simplicity, offering quick online loans for borrowers with poor credit. Their system is designed for instant approvals, and they cater to people in need of immediate cash, offering fast access to loans with transparent fees.

• Loan Amount: £500 – £7,500
• Interest Rate: 39.9% APR (higher for riskier profiles)
• Features: Instant online approval, no guarantor required, same-day cash deposits for approved applications.
• Pros: Finio Loans is perfect for those who need fast cash and are looking for straightforward, no-nonsense terms. Their fully online system ensures minimal paperwork, and funds are often disbursed on the same day of approval.

4. Likely Loans – Best for No Guarantor Loans

Likely Loans offers personal loans specifically targeted at borrowers with bad credit who don’t want to deal with the hassle of finding a guarantor. Their loans are unsecured, meaning you won’t need to provide any collateral.

• Loan Amount: £500 – £5,000
• Interest Rate: 59.9% APR
• Features: No guarantor required, no early repayment fees, fast online application and approval.
• Pros: Likely Loans is great for borrowers who have bad credit but want a simple application process. You don’t need a guarantor or collateral, and the process is fully online, with funds typically disbursed within 48 hours of approval.

5. Bamboo Loans – Best for Long-Term Repayment

Bamboo Loans is a direct lender offering personal loans to people with poor credit. Their primary focus is on providing long-term loans with flexible repayment options, making it easier for borrowers to manage their finances over time.

• Loan Amount: £1,000 – £8,000
• Interest Rate: 49.7% APR
• Features: Flexible repayment terms up to 5 years, no guarantor required, online application.
• Pros: Bamboo Loans offers long-term repayment options, which can reduce your monthly payments and make the loan more manageable for people with bad credit. They’re also transparent, with no hidden fees, and you can adjust repayment schedules if necessary.

6. Admiral Loans – Best for Competitive Interest Rates

Admiral Loans, part of the well-known Admiral insurance group, offers personal loans at competitive rates. Even if you have bad credit, Admiral may still consider you for a loan, although at a higher APR.

• Loan Amount: £1,000 – £25,000
• Interest Rate: Starting from 5.8% APR (higher for bad credit)
• Features: Fixed monthly repayments, no fees for early repayment, flexible loan terms from 1 to 5 years.
• Pros: Admiral is a trustworthy brand offering reasonable rates for borrowers with bad credit. Their no-fee early repayment option gives you flexibility to pay off your loan early without penalty, saving on interest costs.

7. Amigo Loans – Best for Guarantor Loans

Amigo Loans is one of the UK’s leading guarantor loan providers, offering loans even if you have bad credit, as long as you have someone willing to act as a guarantor. These loans are secured by the creditworthiness of your guarantor, not your own financial history.

• Loan Amount: £1,000 – £10,000
• Interest Rate: 49.9% APR
• Features: Guarantor required, no credit checks for the borrower, quick approval process.
• Pros: Amigo Loans makes it easier for people with poor credit to access funds, provided they have a reliable guarantor. These loans are ideal if you need a larger loan amount but can’t qualify for an unsecured loan based on your own credit.

8. Santander Loans – Best for Personal Loans from a High-Street Bank

Santander offers personal loans for both their existing customers and new applicants. Although they primarily serve those with good credit, they also offer loans to those with a bad credit history, with flexible terms.

• Loan Amount: £1,000 – £25,000
• Interest Rate: Starting from 3.1% APR (higher for bad credit)
• Features: Flexible loan terms from 1 to 5 years, no early repayment fees, instant approval for eligible customers.
• Pros: Santander is a trusted high-street bank with competitive rates for borrowers across all credit scores. Their flexible loan terms and no fees for early repayment are major advantages.

9. Zopa Loans – Best for Peer-to-Peer Lending

Zopa was one of the UK’s pioneers in peer-to-peer lending and offers personal loans with competitive rates for borrowers, even those with less-than-perfect credit.

• Loan Amount: £1,000 – £25,000
• Interest Rate: Starting from 5.9% APR (higher for bad credit)
• Features: Flexible loan terms from 1 to 5 years, no hidden fees, personalized loan offers.
• Pros: Zopa offers a transparent process with personalized rates, making it a solid choice for those who want more control over their borrowing. The peer-to-peer lending model often provides better interest rates than traditional banks.

10. Dot Dot Loans – Best for Short-Term Loans

Dot Dot Loans provides short-term loans for people with bad credit who need cash quickly for an emergency. Their loans are straightforward with fixed payments over a set term.

• Loan Amount: £200 – £1,000
• Interest Rate: 535% APR (representative)
• Features: Fixed repayment schedule, online application, quick disbursement of funds.
• Pros: Dot Dot Loans is ideal for people who need emergency cash and want to avoid the complications of hidden fees or fluctuating interest rates. Funds can be available on the same day if your application is approved.

11. Tick Tock Loans – Best for Quick Approval

Tick Tock Loans provides short-term loans with instant approval for individuals who may have bad credit. They offer an efficient application process with transparent terms and a fixed APR.

• Loan Amount: £100 – £1,000
• Interest Rate: 1266% APR (representative)
• Features: Instant decision, same-day funding, fixed repayment terms.
• Pros: Tick Tock Loans are great for people needing fast cash for an emergency. With their instant approval and quick payout, they are a good option for borrowers looking to resolve short-term financial issues.

12. Sainsbury’s Loans – Best for Supermarket Loans

Sainsbury’s Loans provides personal loans with competitive rates, especially for those who hold a Nectar card. They cater to a wide range of borrowers, including those with poor credit, although APRs may be higher for high-risk applicants.

• Loan Amount: £1,000 – £40,000
• Interest Rate: From 3.1% APR (higher for bad credit)
• Features: Fixed monthly payments, Nectar cardholders get lower rates, no early repayment fees.
• Pros: Sainsbury’s Loans offers competitive rates for larger loan amounts, and Nectar cardholders receive additional benefits, including lower interest rates.

13. Reevo Loans – Best for Instant Approval and Flexible Terms

Reevo Loans offers personal loans to people with poor credit. They focus on instant approval, allowing borrowers to receive funds quickly. Reevo Loans also provides flexible repayment schedules.

• Loan Amount: £500 – £15,000
• Interest Rate: 39.9% APR
• Features: Instant decision, flexible repayment terms, online application.
• Pros: Reevo Loans is great for bad credit borrowers who want quick access to cash with the flexibility of customizing their repayment schedule. The no guarantor requirement makes the application process simpler and faster.

14. Little Loans – Best for Loan Comparison

Little Loans is not a direct lender but a loan comparison platform that helps you find suitable lenders for your needs, even if you have bad credit. They work with a panel of lenders, allowing you to compare options.

• Loan Amount: £100 – £10,000
• Interest Rate: Varies by lender
• Features: Quick online application, access to multiple lenders, tailored offers.
• Pros: Little Loans helps streamline the loan search process by presenting you with multiple options from lenders that cater to people with poor credit. This comparison can help you find the best terms and rates quickly.

15. Abound Loans – Best for Large Personal Loans

Abound Loans offers larger personal loans for borrowers looking for debt consolidation or making significant purchases. They cater to bad credit borrowers with more lenient approval criteria.

• Loan Amount: £2,000 – £10,000
• Interest Rate: 24.9% APR
• Features: No guarantor required, no hidden fees, flexible repayment terms up to 5 years.
• Pros: Abound Loans is an excellent choice for those needing to borrow larger amounts. Their interest rates are reasonable for bad credit borrowers, and their no-hidden-fee policy makes the loan terms transparent.

16. NatWest Loans – Best for Banking Customers

NatWest provides personal loans, including for customers with poor credit, at competitive rates. If you’re an existing NatWest banking customer, the application process is even more streamlined.

• Loan Amount: £1,000 – £50,000
• Interest Rate: Starting from 3.4% APR (higher for bad credit)
• Features: Flexible loan terms, instant decision for online applications, no early repayment fees.
• Pros: NatWest is a reputable bank that offers a range of loan amounts. For existing customers, applying online is quick, and you can receive a loan decision instantly.

17. AA Loans – Best for Car Financing

AA Loans is known for offering car loans for people with bad credit. These loans can help you finance the purchase of a vehicle, with fixed repayment terms and competitive rates.

• Loan Amount: £1,000 – £25,000
• Interest Rate: From 3.3% APR (higher for bad credit)
• Features: Fixed repayments, flexible loan terms, online application.
• Pros: AA Loans is ideal if you need to finance a car purchase. They offer competitive rates and flexible terms even for those with bad credit, making them a strong option for vehicle financing.

18. Loans 2 Go – Best for Secured Loans

Loans 2 Go specializes in secured loans, where you can borrow larger sums by using collateral like a vehicle. This can make it easier to get approved for a loan even with bad credit.

• Loan Amount: £250 – £2,000
• Interest Rate: 199% APR
• Features: Secured against an asset, fast approval, quick cash disbursement.
• Pros: Loans 2 Go is a good option for bad credit borrowers who have collateral to secure a loan. The interest rates are high, but the approval process is quick, and you can borrow more than with unsecured loans.

19. Barclays Loans – Best for High Borrowing Limits

Barclays is a trusted high-street bank offering personal loans with high borrowing limits. While they cater primarily to customers with good credit, they also serve those with bad credit but at higher rates.

• Loan Amount: £1,000 – £50,000
• Interest Rate: Starting from 3.5% APR (varies based on credit score)
• Features: No early repayment fees, flexible loan terms, high borrowing limits.
• Pros: Barclays offers a reputable and secure lending experience, especially for those who need larger loan amounts. Even if you have bad credit, Barclays’ terms are often more competitive than alternative lenders.

20. 118 118 Money – Best for Flexible Personal Loans

118 118 Money offers personal loans with competitive terms and is one of the best options for borrowers with bad credit. They emphasize flexibility in repayment and aim to help borrowers manage their debt effectively.

• Loan Amount: £1,000 – £5,000
• Interest Rate: 99.9% APR
• Features: No guarantor needed, flexible repayment terms, online application.
• Pros: 118 118 Money provides a high level of flexibility for borrowers with bad credit. While the APR is higher, the loan process is straightforward, and the repayment terms can be customized to fit your budget.

21. HSBC Loans – Best for Established Banking Services

HSBC offers personal loans with competitive interest rates and a well-known global banking brand behind them. While HSBC primarily serves borrowers with good credit, they do cater to those with lower credit ratings at higher rates.

• Loan Amount: £1,000 – £25,000
• Interest Rate: From 3.3% APR (higher for bad credit)
• Features: Fixed monthly payments, online application, no fees for early repayment.
• Pros: HSBC offers a reliable banking experience with transparent terms. Their loan amounts are versatile, and their rates are competitive for a high-street bank, making them an option for those with bad credit looking for long-term financial support.

22. M&S Loans – Best for Retail-Based Borrowers

M&S offers personal loans with attractive terms, particularly for their banking customers or M&S credit card holders. They provide flexibility with competitive rates for larger loan amounts, even for those with bad credit.

• Loan Amount: £1,000 – £25,000
• Interest Rate: From 3.6% APR (varies based on credit)
• Features: Fixed repayments, no hidden fees, discounts for M&S banking customers.
• Pros: M&S offers loans tailored to their customer base, particularly advantageous if you’re an existing customer. The application process is easy, and you can take advantage of discounts if you have an M&S credit card or account.

23. Monzo Loans – Best for App-Based Borrowing

Monzo provides app-based personal loans, offering full control of your finances directly through their mobile app. They focus on transparency and flexibility for borrowers.

• Loan Amount: £500 – £3,000
• Interest Rate: 20.4% APR
• Features: Mobile app-based application, instant approval for eligible customers, no early repayment fees.
• Pros: Monzo is a great option for younger or tech-savvy borrowers who prefer to manage their finances digitally. The rates are competitive, and their app-based system makes managing your loan simple and convenient.

24. Provident Credit Union – Best for Doorstep Loans

    Provident Personal Credit specializes in doorstep loans, offering short-term, small loans delivered directly to your home. This service is ideal for people with poor credit or those who prefer face-to-face interaction.

    • Loan Amount: £100 – £2,500
    • Interest Rate: 535% APR (representative)
    • Features: Home collection service, flexible repayment options, no hidden fees.
    • Pros: Provident offers loans even if you have a poor credit history, with a representative collecting payments directly from your home. This makes it convenient for borrowers who prefer not to use online services. However, the interest rates are high due to the risk and nature of the service.

25. Halifax Loans – Best for Reliable Banking Services

Halifax is a well-established high-street bank offering personal loans with competitive interest rates and flexible terms for all types of borrowers, including those with bad credit.

• Loan Amount: £1,000 – £25,000
• Interest Rate: Starting from 3.5% APR (varies based on credit score)
• Features: Fixed repayment terms, no early repayment fees, reliable customer service.
• Pros: Halifax provides a trusted banking experience with competitive rates and flexible loan terms. Their online application process is straightforward, making it a good option for those looking for a reliable high-street lender.

What are the alternatives to Bad Credit Loans in the UK?

Credit Unions and Community Lenders

For people with poor credit, credit unions and community lenders may provide a more affordable alternative.

These organizations often offer lower interest rates and more flexible repayment terms. They are more focused on helping people manage their finances, rather than maximizing profit.

Government and Charitable Financial Aid

In the UK, you may also be eligible for government-backed financial aid or grants through charities. There are also government interest free loans which you can opt for.

These options provide financial assistance with no or low interest and don’t require a credit check. Explore options like Universal Credit advances or local welfare assistance schemes.

What Are Some Flexible Quick Loan Options for Small Amounts?

0 Interest Loans for 12 Months

These loans offer 0% interest for the first 12 months, allowing you to borrow without paying any additional fees or interest during this period. They’re often promotional offers from credit unions, retailers, or peer-to-peer lenders, ideal for short-term borrowing if repaid on time.

Borrow £500 Over 12 Months

Borrowing £500 over 12 months is a common option for those needing a small loan. Many personal loan providers offer this with fixed monthly payments, and APRs can vary from high-street banks to specialized bad credit lenders, usually with manageable repayments.

£1,000 Loan Over 12 Months

A £1,000 loan over 12 months offers more flexibility and is ideal for debt consolidation or emergency expenses. Depending on your credit score, you can get it from direct lenders like Everyday Loans or Oakam, with interest rates adjusted for bad credit borrowers.

£3,000 Loan Over 3 Years

For those seeking a £3,000 loan over a longer period, loans with 3-year terms are available from lenders like Tesco Loans or Barclays, offering fixed repayments spread over 36 months. This is ideal for home improvements or larger purchases, with reasonable interest rates even for bad credit.

Quick Cash Loans Online, No Credit Check

If you’re looking for quick cash loans without a credit check, lenders like CashFloat or Dot Dot Loans provide no-credit-check loans for bad credit borrowers. These are typically short-term loans with fast approval and instant payouts, though they come with higher APRs due to the lack of credit assessment.

Conclusion: Choosing the Right Loan for Bad Credit

Finding the right loan when you have bad credit can be challenging, but it’s possible with the right approach. The key is to research your options, compare interest rates, and ensure that the loan terms fit your financial situation.

While loans for bad credit can provide relief, they also come with risks, so be sure to borrow responsibly. Keep improving your credit score to access better financial products in the future.