UK Bad Credit Loans
Bad credit loans are quickly gaining popularity in the UK as a form of fast cash that people with bad credit can rely on when they’re in a pinch.
UK bad credit loans (also known as a payday loan) are short unsecured loans for small amounts available for people that have bad credit. An unsecured loan is a loan that is not backed by collateral (or something of value).
Secured loans, such as auto loans, allow lenders to take your collateral (like your car) if you fail to repay the loan on time. Since bad credit loans in the UK are unsecured, lenders rely on your word to repay the amount you borrow.
UK payday loans do not require credit checks, so borrowers with bad credit are eligible to obtain payday loans. Although credit checks are not required, borrowers are still expected to meet certain qualifications to ensure they are capable of repaying the payday loan.
UK Bad Credit Payday Loan Qualifications
- Must be 18 years of age or older
- Must be employed in the UK
- Must have consistent paycheck deposits
- Must be a UK resident
- Must earn over ₤500 per month
- Must have active bank account that accepts direct deposits
- Must have a number that you can be reached at
UK bad credit loans are for small amounts, ranging from ₤50 to ₤1,000, with loan amounts averaging ₤300. Payday lending is intended to provide borrowers with fast cash to help them cover any unexpected expenses that arise.
Payday Loans are used to:
- Pay for emergency expenses (such as groceries)
- Cover unexpected expenses (such as auto repairs and MOT tests)
- Avoid more expensive fees (like late charges or overdraft fees)
Typically, we recommend that UK customers do not use bad credit loans for unnecessary expenses since payday loans can be so expensive. High interest rates leave borrowers paying about ₤25 for every ₤100 borrowed, so it’s important to make sure that you are willing to spend the extra ₤25 if you use a payday loan.
Payday Loan Costs
Understand UK payday loan charges and costs before requesting a payday loan online. Payday lenders typically charge ₤25 for every ₤100 borrowed, which means that if you borrow ₤100, you will end up repaying ₤125. If you borrow ₤50, you will have to repay ₤62.5. This fee represents a 1,940.5% APR (or Annual Percentage Rate), much higher than many other loans. (This is because the loan is just a two-week loan, we should mention).
APR is a standard that many users use to compare loans.
Bad credit lenders charge high rates to make up for any potential losses associated with lending to high risk (bad credit/zero collateral) borrowers. The fees are straightforward, so you are aware of what you will be charged.
Be advised that rollover costs (or charges for extending the due date) are costly and quickly add up. Continuing to roll over your payday loan is not an effective strategy for repaying your loan and if can mean you end up owing much, much more than you initially borrowed. Repay payday loans on time to avoid additional charges and unmanageable debt.
Payday Loans Online
Applying for payday loans online is easy and safe. Payday lenders use encrypted websites in order to securely gather your information while protecting your privacy.
Compare payday loan costs so that you can obtain the most affordable payday loan available - you can use creditsources.org to compare UK payday loan offers.
Payday Loan Regulations in the United Kingdom
Payday lenders must be registered with the Office of Fair Trading (OFT) in order to provide payday loans to borrowers in the United Kingdom.
There are no restrictions on the interest rates lenders can charge, so interest rates can vary largely from one lender to the next.