Getting a loan from a bank can be difficult if you have bad credit, but many loan providers specialise in instalment loans for people who don’t have the best credit history. Most lenders that provide instalment loans focus on your ability to repay rather than your traditional credit score.
An instalment loan is a type of short-term loan that you repay through a series of regular payments. These are usually monthly but can be weekly. You typically repay the loan over a period of 3, 6 or 9 months, but some lenders let you borrow for longer.
You can usually borrow up to £1,000 to £2,000, but again, this depends on the lender. If you’re a new customer, you might only be able to borrow a smaller amount initially. Interest is charged on your repayments, and rates can be high.
An instalment loan might suit those who need to borrow some extra cash to pay a bill or make an emergency purchase but know they can’t repay it in full by their next payday (as you would with a payday loan).
Instalment loans enable you to repay the amount borrowed in smaller and more affordable amounts over a short period, which can make it easier if you’re on a budget. Your repayments will be fixed too.
Instalment loans can also work for those with poor credit.
What matters most is your ability to make your repayments. If you have a steady income and a valid bank account, a bad credit instalment loan lender might be more prepared to offer you a loan than a traditional bank or credit card company.
When you apply to one of these lenders, make sure you meet all the requirements listed on their page. There’s no guarantee that you’ll be approved, but making sure you are eligible before applying increases your chances.
Different lenders have different criteria for who they give loans to, so compare providers and only apply for as much money as you need.
Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
To be eligible for an instalment loan, you usually need to:
Most bad credit instalment loans work in the same way. You start the process by submitting your application, and in most cases, you can find out if you’ve been approved within a few minutes. Following approval, you’ll often receive your loan the same day – sometimes in as little as an hour, depending on the lender.
Rather than repaying the borrowed money in one lump sum on your payday, the payments are spread out in fixed instalments (including interest) over a period of months. However, be warned that if you miss several repayments on your loan, it is recorded on your credit file and can affect your ability to get credit again in the future. As with all short-term loans, be sure you can repay both the principal and accrued interest before signing the contract.
When comparing instalment loans, ask yourself the following questions:
Look into bad credit payday loans if you only need to borrow a small amount
Instalment loans charge high rates of interest, so it’s crucial to assess whether you can afford to repay your loan in full before applying. Spreading your repayments over a longer period reduces your monthly repayments but also means you’ll pay more interest overall. Always work out how much it will cost before you apply.
If you think you might have trouble making your repayments or that the repayments might put a strain on your budget, you should reconsider applying for this type of loan. If you fail to make your repayments on time, you may have to pay additional fees, and it can negatively affect your credit score.
Before you accept any loan contract, go through the terms and conditions carefully so you have a clear picture of how much you may have to pay in fees and charges.
Many instalment loan providers are authorised and regulated by the Financial Conduct Authority (FCA). This means the company is reputable, and your rights are protected. Be sure to check this before applying with any lender.
There are still options to borrow money if you have bad credit. An instalment loan gives you the ability to repay over time. It means more budgeting, but bad credit instalment loans can be paid off over time, leaving you less likely to default than a normal payday loan.
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A payday loan gives you the money you need quickly, even if you have bad credit or low income. But which one is best for your situation?
I need short-term cash as had a large unexpected bill but have a very poor credit rating. Please help.
Hi Pjm,
Thanks for getting in touch with finder. I’m sorry to hear about the large unexpected bill that you need to pay.
To help you, you might want to check our page that lists bad credit payday loans. On that page, you will read a guide to help you better understand how to apply for a loan even if you still have bad credit. There’s also a table that helps you compare your options based on available amounts, monthly repayment, and total payable. You can then click on the “Go to site” green button to learn more.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua