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Searching for a guaranteed loan can be a challenging task, especially since loans that you’d be guaranteed to be accepted for don’t technically exist! You may come across loans that are pre-approved (pre-approval loans), which is where lenders initially review your eligibility based on the information you provide. However, whether your application is successful or not will still rely on you meeting certain criteria, so they are not guaranteed.
It’s important to note here that you will likely come across loans that are guaranteed by a third party and these are usually called guarantor loans - but can also be referred to as guaranteed loans. You can read more about third party guarantor loans.
We understand that it can be super-confusing working out what every loan type means. The idea of guaranteed bad credit loans, or guaranteed short term loans, or even guaranteed acceptance loans, may sound attractive but, ultimately, any reputable lender will first need to assess your income, credit history and ability to repay the loan (among other factors) before deciding to part with any money – or not. What’s more, if you have bad credit, your pool of options will almost certainly be smaller.
The term ‘bad credit’ typically means having a less than average credit score. It reflects factors such as a history of missed or late payments, defaulting on previous loans, or even filing for bankruptcy, which can all contribute to a lower credit score. It’s factors such as these that traditional financial lenders use to assess the risk associated with applicants who wish to borrow from them. If you have a poor credit history, you may find it challenging to secure a loan, as conventional lenders may see you as a high-risk borrower.
Any loans available to you will also probably come with higher interest rates and additional fees, and could require some sort of security against it, like your home or car. This is to compensate the lender for the increased risk of lending to you. It’s therefore important that you understand the terms and conditions of any loan you apply for and always borrow from a reputable lender.
As the Financial Conduct Authority (FCA) legally requires lenders to run credit checks on all applicants, it's unlikely that you’ll get guaranteed loan approval without them, especially if you have a less than favourable credit history. Even if you've been wondering what bad credit guaranteed loan options may be out there, your finances will likely come under scrutiny. Therefore, taking steps to improve your credit score and how you manage your finances could help boost your chances of a successful application in future.
Unfortunately, as these types of loans aren’t available from high street lenders regulated by the FCA, you won’t be able to get a guaranteed bad credit loan. However, if you’re in financial difficulty and are worried that your poor credit history will limit your borrowing options, it’s wise to compare what different FCA-regulated lenders are offering.
Some lenders, for example, don't just look at the usual range of eligibility factors and your credit score. At Creditspring, we keep in mind your overall financial situation and your ability to repay what you borrow. If you’re not eligible for one of our loans yet, we can help you build your credit rating and become more financially stable until you are.
While loans with guaranteed approval aren’t available from most traditional lenders, it’s worth knowing – and understanding – the different borrowing options that might be available to you, whether you have bad credit or not. For any type of loan, always ensure you have read and understood the lender’s terms and conditions first, and be certain that you can afford the repayments.
Secured loans: These loans usually require an asset (or collateral) that you own, such as your home or a car, for example, to ensure the lender has a way of getting their money back, if you stop making your loan repayments. Secured loans may come with lower interest rates as they are backed up by your asset, but your creditworthiness will also be taken into consideration.
Unsecured loans: You won't be required to provide an asset that you own for an unsecured loan (like your car or home), but your borrowing options will be more limited, and the interest rates for these types of loans are often be much higher.
Payday loans: These are short-term loans with very high interest rates, designed to cover expenses until the next payday – hence the name, ‘payday loans’. While they can provide borrowers with money quickly for sudden or unexpected expenses, they also have to be repaid quickly (over a week or a month, for example), and any missed payments usually come with high penalty charges. This can often lead to a cycle of debt, making payday loans a last resort option that you should consider with caution.
Instalment loans: Any type of loan that requires you to repay the money you borrow in monthly repayments – with interest or a fee on top - over a fixed period of time, is an instalment loan. Examples include a mortgage, a hire purchase loan for a car, or a personal or student loan.
Short term loans: If you’re looking to borrow money within a few days and pay it back as quickly as possible, a short-term loan may be a good option. However, some short-term loans come with high interest rates and additional repayment charges making repayments, making the overall loan amount much more costly.
Bad credit personal loans: The term ‘bad credit personal loans’ usually refers to a type of credit product (e.g., a loan) for people who have a poor – or no – credit history. Depending on the lender, these loans may require a guarantor or an asset (like a property or car) to secure against the loan. Some lenders, however, look at other factors beyond an applicant’s credit score and this is the approach we take at Creditspring, even if your credit rating is below average. You can learn more about the loans that Creditspring offer here.
Having a poor credit history may limit the number or type of loans available to you, so keep in mind the following factors that often come with them:
As many traditional lenders view applicants with bad credit as higher risk, their loans often carry higher interest rates to compensate for this. If you’re eligible, you may be able to access the money you need, but the interest will significantly increase the total amount you have to repay.
Some loans may include additional fees, such as late payment penalties, which can add to the overall cost of the loan.
If you miss payment on, for example, a payday loan - which can come with extremely high-interest rates and fees – you may find yourself continually borrowing more money to pay the initial debt off. This can lead to an ongoing cycle of debt that could make you worse off than when you started.
Over time, never missing a loan payment can help improve your credit score, but should you skip a payment or default on a payment, this will likely further damage your credit rating.
If you're looking for a bad credit loan and are having trouble obtaining one, you may come across unregulated lenders, often known as loan sharks. These loan providers may offer you money quickly and with fewer eligibility checks, but they come – quite literally – at a price, and a very costly one at that. High interest rates exceeding 1000% APR along with unmanageable late payment fees are just a couple of types of charges you could be stung by, so it's important to only borrow from lenders regulated by the Financial Conduct Authority. Always ensure you repay your loan on time and in full.
Whether you have bad credit or not, you’ll need to meet certain requirements from any regulated lender you wish to borrow from as standard. These can include anything from proof of income, your employment status and your age, to your country of residence and having valid ID documents. Reputable lenders will also need to run a credit check and may even require you to provide a guarantor.
We look beyond your credit history when assessing your eligibility and keep in mind your overall financial situation, as well as your ability to repay the loan.
Our typical eligibility criteria include being a UK resident aged 18 or over, having a stable income and satisfying our affordability and credit checks*.
If you are approved and choose to become a Creditspring member, we’ll let you know within a few minutes. If you change your mind, our 14-day waiting period will give you time to decide whether you still need the money or not. After that, you can request the funds to be paid into your bank account. Payments are made seven days a week, except for bank holidays. You can check your eligibility right now.
What's more, if you’re not yet eligible, we can still help you! When you sign up as a free member, you’ll gain access to our members-only space packed with smart credit-boosting tips, exclusive partner offers and personalised scores.
*this list is not extensive
When you’re considering taking out any type of loan - especially if you have bad credit - it’s essential that you borrow safely to avoid further financial distress. Here are some key practices to follow:
Make sure you thoroughly review all the terms and conditions of the loan you’re taking out, including the interest rates, fees, repayment schedule and any penalty charges.
Assess your repayment ability: Honestly evaluate your financial situation to ensure you can comfortably meet your repayment obligations without compromising your other monetary commitments. For example, can you afford your monthly mortgage payment or rent, plus your current bills, as well as the loan repayment?
Compare different lenders: Don’t settle for the first offer you get. Compare various lenders to find the best terms and rates but be mindful of applying to too many lenders within a short space of time as this could affect your credit rating (and could leave lots of ‘hard’ marks on your credit report, thus lowering your score).
Beware of unregulated lenders: Be cautious of lenders that offer loans without credit checks or with extremely high fees and interest rates. You don’t want to damage your credit score or end up in a cycle of debt.
Wary of the risks associated with loans for bad credit? There are a few alternatives to consider.
Credit unions often offer loans with more favorable terms than traditional banks, especially for people with a less-than-perfect credit history.
Some community organisations and charities offer emergency financial assistance or low-interest loans, particularly in times of hardship.
While this can be a sensitive option, it might offer more flexible terms and lower - or no - interest rates. It’s advisable to draw up a formal agreement by a legal professional, if possible.
As we’ve established, guaranteed loans don’t exist. If you have bad credit, it’s likely that any borrowing options available to you will come with high interest attached. These rates will vary significantly based on the lender, of course, as well as the loan amount and your specific financial circumstances. Typically, though, lenders will charge higher interest rates on loans to compensate the risk associated with lending to individuals with poor credit ratings.
To find the best option for you, it’s important to shop around and compare different loan offers to suit your borrowing needs and circumstances.
As your credit score changes based on how you manage the money you borrow, you could see your credit score improve over time. Therefore, a loan for bad credit can be an effective way of rebuilding your credit score, providing you manage it responsibly. Paying your debt off regularly and on time will show lenders that you are a reliable borrower, which can positively impact your credit score.
