Are Bank Loans for Bad Credit Possible?

Q: Are bank loans for bad credit possible? ~ Jim, Watford.

Non of the many banks that we have Compared cater applicants with low scores. When scanning through eligibility requirements it has been common to see the headline that a CCJ would trigger a decline. There hasn’t tended to be supporting notes regarding missed payments, defaults etc, but the chances of seeing a decline would be high. The banks have remained strict since the financial crisis took place (2007/2008). You also have to factor in that they are offering unsecured agreements on sums that run in the thousands. Barclayloan even heads to £50,000. Minimal risk of default is essential and so they’ll seek a high score out of 999 from Experian (some may use another CRA).

Some banks even restrict their personal lending to existing banking customers. Others don’t, especially the retailers who have crafted their own banking divisions. Bank loans for bad credit may be unlikely today, but in the years ahead the chances of approval would be increased by taking steps to improve your score. This means that you may have to take on the high cost subprime products. A Guarantor Loan is a good option, boasting respectable interest rates, but a backing must be sourced. Most of the top lenders in the guarantor niche report your activity to CRAs and so this can help you over time. It is understandable that finding a third party may unsettle some.

A good no guarantor loan option would be Likely Loans. They are happy to consider low scores and they offer as much as £5000 paid out on the next working day. There are similar lenders like Likely, but they are distinctive through their competitive interest at 47.9% APR. Another good step is to borrow a subprime card through a lender like Capital One, Vanquis etc. Credit cards can again help you to climb the ladder when you manage the account well. There would be no harm in applying for a loan with your bank. Perhaps a better approach would be to apply for an overdraft (or extension) and then work your way up.