Bad Credit Loans UK: How to Get Approved (2025)
Complete guide to getting a loan with bad credit in the UK. Compare your options, understand costs, avoid predatory lenders, and learn how to improve your approval odds.
Bad credit loans help those with poor credit histories, but come with higher costs. Explore alternatives first.
| Loan Type | Typical APR | Best For |
|---|---|---|
| Credit Union | 12-42% | Most affordable option |
| Guarantor | 29-49% | Larger amounts needed |
| Secured | 7-25% | Homeowners |
Try Credit Unions First
Frequently Asked Questions
Can I get a loan with a 400 credit score?
Yes, but your options are limited to specialist lenders, credit unions, and guarantor loans. Expect rates of 30-50% APR. Credit unions are your best bet as they consider your current circumstances, not just your score. Consider improving your credit for 6 months before applying to access better rates.
Will applying for a bad credit loan hurt my credit score?
Yes, each application creates a hard search that temporarily lowers your score by 5-15 points. Multiple applications in a short period cause more damage. Use eligibility checkers (soft searches) first to minimize impact. If approved and you make payments on time, your score will improve over 6-12 months.
How long after a CCJ can I get a loan?
You can apply immediately, but expect higher rates and limited options. Specialist bad credit lenders and credit unions work with CCJs. After 3 years, the CCJ's impact decreases significantly. After 6 years, it's removed from your credit file entirely. If you pay the CCJ within 30 days, it won't appear on your credit file at all.
Are bad credit loans worth it?
It depends on your situation. For essential expenses (car repairs needed for work, emergency home repairs, debt consolidation at lower rates), they can be worthwhile despite high costs. For non-essential purchases (holidays, new furniture, electronics), the high interest makes them poor value. Always explore alternatives first.
What's the easiest bad credit loan to get approved for?
Credit unions typically have the highest approval rates for bad credit borrowers, followed by guarantor loans (with a suitable guarantor). Payday loans have high approval rates but should be avoided due to extreme costs (1,500%+ APR). Use eligibility checkers to find lenders most likely to approve you.