What Loans Are Available For Bad Credit Histories?

A bad credit loan is aimed at people who have a bad credit history, or potentially no credit history at all. They are not always provided by the main banks and building societies, and then can have higher interest rates than standard, due to the level of risk posed to them in lending money to you.

Check your eligibility for a bad credit loan with One Stop Money Shop:

Loans available for people with bad credit include:

Payday loans
Guarantor loans
Peer to peer loans
Credit unions
Secured loans
Logbook loans
Borrowing money from family and friends

What is the eligibility for a bad credit loan?

Must be over 18 years of age
Have some kind of income – part-time or full-time
Can be unsecured (payday, credit union)
Can be secured against a property or vehicle (secured, logbook)
May require a co-signer or guarantor (guarantor loans)
Must have a UK bank account
Must have a valid UK mobile phone and email address
Must be able to afford monthly repayments
CCJs considered
Not currently bankrupt

How much can I borrow with a bad credit loan?

If you have bad credit, most unsecured options will let you borrow a maximum of £200 or £300. This may be a little higher if you have a strong and stable income.

If you have some valuable security such as a car or property, you may be able to borrow a £1,000 upwards, maybe even £5,000 or £10,000 but note that if you struggle to repay, you could lose this valuable asset through repossession.

Compare loans for bad credit:

Loan type	Typical loan amount	Interest rate / APR	Cost of borrowing £300	Security required?
Guarantor loans	£1,000–£15,000	Around 30–60% APR	£45–£83*	No physical security; a guarantor is required
Peer-to-peer loans	Varies; potentially up to £35,000	Around 8–25% APR*	£13–£38*	Usually unsecured
Secured loans	Usually £5,000 or more	Around 6–16% APR*	£10–£25*	Yes, usually a property or valuable asset
Logbook loans	Varies; often hundreds to thousands of pounds	Often 400% APR or more	£346 or more*	Yes, a vehicle
Credit union loans	Hundreds to several thousand pounds	Varies; maximum 42.6% APR in Great Britain	£20–£62*	Usually no physical security
Payday loans	£50–£1,000	Often over 1,000% APR	Up to £72 interest for 30 days	No; usually unsecured

Types of loans for bad credit histories

Payday loans

Payday loans from a direct lender of the most common forms of loans for people with bad credit. Average amounts are £200-£300 and to be eligible, you require a stable income and employment and to be able to afford monthly repayments. Customers with existing or completed CCJs may also be considered. Rates are high, with the APR usually around 400% upwards, with the typical loan term around 90 days.

Guarantor loans

This is a type of unsecured loan available to those with poor credit. Whilst they work in a similar way to your average loan, in the sense that you will need to make loan repayments, it works differently in another way: in order to be approved for the loan, you will need to have a suitable person to act as the guarantor for it. If you fail to make repayments on the loan, the guarantor you have nominated will be legally required to make the payments for you.

In most cases, you can borrow £1,000 to £10,000 in total, with payments split evenly each month. There is usually flexibility in terms of your repayment plan: with the option to choose to pay it back over a period between one and five years.

If you would prefer to not use a guarantor involved in your loan agreement, see no guarantor loans.

Peer to peer loans

Another potentially viable option if you have a poor credit history is a peer to peer loans. This will mean that you borrow money from other investors, as opposed to a loan from a traditional lender. The amount you can borrow is usually quite flexible: up to £35,000 with most loan providers, and you may also be able to apply for business finance of up to £5 million.

In terms of repayment, you will owe money to a number of savers who have invested in the peer-to-peer platform, but the money you pay back will be only in the form of one payment.

Furthermore, rates for peer-to-peer loans tend to be more competitive than you would find elsewhere including low rates from Zopa and Ratesetter.

Secured loan

If you have a poor credit score due to a bad credit history, you could also potentially look at getting a secured loan, providing that you have assets. In this case, a loan is approved providing that you put an asset (such as equity in a property or in a car) that acts as security against the loan.

It can often be the case that you can borrow more than other types of lending but it comes with greater risk: the lender has the right to repossess the assets if you default on your payments.

Logbook loan

A logbook loan is a type of secured loan where a borrower uses their vehicle as security while still being able to drive it, provided they keep up with repayments.

In the UK, borrowers can typically borrow between £400 and £5,000, although some lenders offer amounts from £500 up to £50,000, depending on the vehicle’s value. Interest rates are very high, with APRs often reaching 300–400% or more.

For example, MoneyHelper explains that borrowing £1,500 over 18 months at 400% APR could result in repayments of approximately £502 per month and over £9,000 in total. Although logbook loans may be available to people with poor credit histories, they are risky because the lender can repossess the vehicle if repayments are not maintained.

Credit unions

A credit union is a member-owned financial organisation that offers loans, savings accounts and other financial services. Credit unions often provide more affordable borrowing options than payday lenders, and they may be more flexible with people who have lower credit scores.

Typical loan amounts vary depending on the credit union, the borrower’s income and their ability to repay, but personal loans may range from around £100 to £25,000. Interest rates vary according to the loan size, repayment period and the borrower’s circumstances.

In the UK, credit unions can charge up to 3% interest per month (42.6% APR) in England, Scotland and Wales, although many charge less. Borrowers usually repay the loan in regular instalments, and membership may be required before applying.

Borrowing from family and friends

Borrowing money from family and friends can be a convenient way to access money without applying to a bank or other lender. The amount borrowed can range from small sums, such as £50 or £100, to several thousand pounds, depending on what the lender can afford and what the borrower needs. Interest rates are often 0%, meaning the borrower only has to repay the original amount, although some people may agree to charge interest.

There are usually no formal credit checks or application fees, and repayment dates can be flexible. However, it is important to agree on the amount, repayment schedule and any interest in writing to avoid misunderstandings and prevent financial disagreements from damaging personal relationships.

Why Use The One Stop Money Shop For a Bad Credit Loan?

At The One Stop Money Shop, we believe that past financial difficulties shouldn’t define your future. Established in 2005, we have years of experience helping customers explore their borrowing options and work towards a stronger financial position.

FCA Regulated: We operate within the Financial Conduct Authority’s regulatory framework, giving customers confidence that their application is handled in line with applicable regulatory requirements.
Established and Experienced: We’ve been helping customers since 2005, building our experience in supporting people with different financial circumstances.
Safe and Secure: We take the security of your personal information seriously and aim to make the application process straightforward and transparent.
Direct Lender: Deal directly with us, without the need to go through a credit broker, so you can discuss your application with the lender.
Check Your Eligibility with Confidence: Checking your eligibility won’t affect your credit score, provided the initial check uses a soft credit search.
No Impact if You’re Declined: If your application is unsuccessful following a soft eligibility check, that check won’t affect your credit score. Any subsequent hard credit search, if required, may have a different effect.

We’re Here to Help You Move Forward

We understand that having a bad credit history can make finding suitable borrowing more difficult. Our aim is to help customers understand their options, make informed financial decisions and improve their financial position over time.

Take the first step today and check your eligibility. Find out whether you could qualify without affecting your credit score through an initial soft search, subject to the terms of the application process.