Everyone makes mistakes, and bad credit loans are designed for people who’ve struggled to manage money in the past. Whether you’ve got a CCJ against your name or failed to make repayments on previous credit, you might be worried you won’t be able to access funds going forward, and that’s where we can help.
Here at Ocean Finance, we specialise in finding loans for people with bad credit and believe everyone deserves a second chance. There are loads of reasons you might have ended up with a poor credit history, but we work with a panel of trusted lenders to find the best deal on a range of loans to suit every situation.
What loans can I get with bad credit?
There are two main types of poor credit loan and which you opt for will depend on your circumstances, as well as how much you’d like to borrow.
A secured loan means you’re borrowing money against the value of your property so you must be a homeowner to be eligible. Using your house as an asset gives lenders the reassurance that they can fall back on it should you fail to make your repayments.
With a secured loan (also known as a homeowner loan) arranged by Ocean Finance, you could borrow between £10,000 and £100,000, for up to 25 years.
Because of the added security net a secured loan offers, they can sometimes be ‘easier’ to access with bad credit as lenders are more reassured they’ll recoup their money one way or another.
When considering a secured loan it’s important you’re confident you’ll be able to keep up with your repayments both now and in the future. If you don’t, your home could be at risk.
Secured loans: Homeowner loans are secured against your property. We are a broker and we arrange secured loans from a panel of lenders. We receive commission upon completion. A broker fee of 12% of the net loan amount, set at a minimum of £995 and capped at a maximum of £3995 is payable upon completion and can be added to your loan.
An unsecured loan, on the other hand, isn’t fixed to any asset other than you and for this reason, they're sometimes called personal loans.
Since lenders are relying on you alone to repay the sum they’re likely to be more particular about your credit history, making it trickier (but certainly not impossible) to access an unsecured loan with poor credit. On the flip side, you won’t be risking your home by taking one out.
With an Ocean Finance unsecured loan, you could borrow between £100 and £10,000 for up to five years.
Unsecured loans: 49.9% APR Representative (variable). Ocean Finance is a trading style of Intelligent Lending limited. We are a credit broker working with a panel of lenders to find you a personal loan.
Every lender will have their own application process but with us, it couldn’t be easier. To get an idea of how much your ideal loan might cost head over to our loan calculator which will tell you what your monthly repayments could look like.
Want to know if you’re likely to be accepted? Here’s what the process will look like:
Tell us how much you want to borrow and for how long
Give us a few personal details like your name, address and occupation
We’ll pop them into our eligibility checker (which won’t affect your credit score)
You’ll get a ‘yes’ or ‘no’ on the spot.
It really is as simple as that. If you want to proceed just continue with your application in full and we’ll do all the hard work, scouring our panel of lenders to find your perfect loan.
Try our loan calculator to see what your payments could be
The amount we show you is just an estimate. To get a personalised quote, we’ll ask for a few more details.
Estimated monthly payments:£0
Based on your loan request, you could be suitable for an
Representative Example: If you borrow £19,200 over 8 years, initially on a fixed rate for 2 years at 5.39% and for the remaining 6 years on the lender's standard variable rate of 4.99%, you would make 24 monthly payments of £280.36 and 72 monthly payments of £277.16. The total amount of credit is £21,824; the total repayable would be £26,684.16 (this includes a Lender fee of £320 and a Broker fee of £2,304). The overall cost for comparison is 9.04% APRC representative. This means 51% or more of customers receive this rate or better. We have found loans with rates from 2.6% to 26.3% APRC which has allowed us to help customers with a range of credit profiles.
Representative Example: If you borrow £1,800 over 24 months at an annual interest rate of 41.2% (fixed), Representative 49.9% APR, you would pay £111.28 per month. The total amount repayable will be £2670.72
How do I know if I have bad credit?
You can check your credit file through one of the main reference agencies, Equifax, Experian and TransUnion. These bureaus are also used by lenders to complete a credit check after you've made a complete application.
Can I get a loan with no guarantor and bad credit?
Using a guarantor on your bad credit loan can be useful if your credit’s so poor you’ve struggled to secure a loan on your own. With a guarantor loan a friend or family member with a good credit file puts their name on your loan and agrees to make your repayments should you fail to.
Can I get a debt consolidation loan?
The quick answer to this question is yes. Once you’ve successfully applied for your loan, whether it’s secured or unsecured, you can use it for whatever you want.
If you’re feeling bogged down by multiple outstanding lines of credit - store cards, overdrafts, credit cards or otherwise - using your loan to consolidate those debts can be a great solution. Why? Because you’ll cut out the stress of dealing with several lenders and keeping up with multiple repayments and instead be left with one monthly payment and a single lender. However, be careful as you may end up paying back more interest over all or over a longer term.
How can I rebuild my credit history with a loan?
Taking out a loan can actually be used to boost your credit score in the long run, but that’s after the initial knock it’ll give when you first secure it.
One factor which influences your score is how much debt you have in your name, and by taking out a loan you’ll increase that sum. Hence the small negative immediate effect.
After that though, by keeping up with the terms of your loan agreement - i.e. making your repayments on time and in full - you’ll be demonstrating your ability to manage money. This should start to improve your credit score.
For more help on boosting your credit score, check out our complete guide.
Things to consider before applying for a bad credit loan
You are unlikely to find an interest-free loan, and you will likely be offered higher interest rates if you have a poor credit history.
If you miss any payments or they are not paid in full across the entire loan term, you may face more interest charges or fees. In serious circumstances, you could face a CCJ or with a secured loan, your home may be repossessed.
You may be able to consider other borrowing options first before completing a loan application, such as credit cards, an overdraft or borrowing from a family member.
Frequently asked questions
What can I use a poor credit loan for?
Once the money hits your account it’s yours to spend as you see fit. So, whether you want to make some home improvements, need a new car, or decide to consolidate your debts, it’s entirely up to you.
Can I still get a loan if I’ve missed payments in the past?
Missing credit repayments in the past is one of the main reasons people end up with a less than perfect credit record, and so a bad credit loan could be the ideal fit.
It’s not the end of the road though. If your credit report isn’t as peachy as you’d like our panel of lenders have loans designed for people like you so while it might be harder, it’s not impossible.
Will this loan affect my credit score?
Initially, yes. Because you’ll be increasing the amount of debt in your name, a loan will have a short-term negative impact on your score. But, keep up with your repayments on time and in full, and you’ll start to build it back up over the duration of your loan.
Will a poor credit loan be more expensive?
In order to take the plunge and lend to someone with bad credit, lenders generally charge more in interest to compensate for that risk. With higher interest rates, your loan might cost you more than someone with a pristine record.