Loans for bad credit

Bad credit refers to a low credit score, often resulting from late payments, defaults, or high levels of debt. It indicates to lenders that a borrower may be a higher risk, making it harder to get loans, credit cards, or favourable interest rates.

Although your options may be limited, there are certain lenders who offer products specifically for people in this situation. Here at Ocean, we can compare loans for you to find the best deal you’re eligible for from our panel of lenders.

A bad credit score can result from several factors, including:

missed or late payments on credit accounts

carrying high levels of debt

having a short credit history

or frequently applying for new credit

Negative marks such as defaults, bankruptcies, or county court judgments (CCJs) can also lower your score.

This comes down to the perceived risk for the lender. If you’ve had issues with credit in the past, the worry is that you might again. This can mean being offered lower loan amounts and charged higher interest rates to balance out that risk.

It’s a big commitment to get any kind of loan, so it’s important that you make the right decision to suit your circumstances. Here are some things you should consider before you apply:

Your affordability - Review your budget and how much you can afford to borrow each month.

Loan type - You should explore your options and weigh up the pros and cons of unsecured loans and secured loans. Secured loans can allow you to borrow larger amounts against your home, with lower interest rates than personal loans. But your home could be at risk if you fall behind with your repayments.

Interest rates - Borrowing when you have a poor credit score can be costly as the lender may apply higher interest rates. You could shop around to find the best deal you’re eligible for - or work on improving your credit score first to boost your chances of getting accepted with better rates.

Your eligibility - Before you apply, use eligibility checkers to find out the likelihood of being accepted – without affecting your credit score. Remember, you must be a homeowner to be eligible for a secured loan. 

To apply for a bad credit loan, you typically need:

Proof of income, e.g. payslips or bank statements

Identification, e.g. a passport or driver’s licence

Proof of address, e.g. a utility bill

Lenders will also check your credit score and may require details of any existing debts.

Yes, you can pay off your loan early. Some lenders may allow you to make overpayments to clear your loan quicker or give you the option to pay it off in full at any time. You may be charged an early repayment charge (ERC) if doing so, however we have options that mean you may be able to do this without incurring an additional cost.

There are various loan types for bad credit, and whilst some include guarantor options, there are also many that don’t. Here at Ocean, we offer bad credit loans without the need for a guarantor.