The 3 Worst Bad Credit Loans In The UK!

If your credit rating could use a little TLC, your available options are very likely to be limited as most high street lenders will not lend.

So to help you to not get burnt, we look at the three worst types of loan we have found in the UK – the ones to avoid!

pawn broker logo1.Pawn Shops

Whilst many people would not automatically make this type of association, basically it is, and you are simply offering a personal possession as security if you do not pay the loan back.

So if you do not make your scheduled repayments, you will lose the item used.

Plus depending on the pawn shop you have used, borrowing this money could be very expensive, especially if you lose the item you pawned.

payday marked on calendar picture2.Payday Loans

This industry has received a lot of press in the UK to the extremely high interest rates charged.

The Guardian reported in March 2013 one lender charging an interest rate of 16,734,509.4%!!!!!

So whilst this extremely high rate is unusual and most payday lenders charge between 2,000% and 5,000% APR, these charges are still extremely high and this is a very expensive form of borrowing.

Always approach this type of finance with extreme caution as they are very expensive. If you are prepared to look beyond the warnings, please make sure you know exactly how much the charges are before you borrow and make sure you pay you back on time, otherwise this is when the costs really start racking up.

shark with a briefcase of money3.Loan Shark

A loan shark is someone who lends money without the appropriate license issued by the Financial Conduct Authority.

Typically they charge very high interest rates, do not issue paperwork, and will use illegal action such as intimidation and violence to collect the money they have lent.


If you think a money lender is operating without the correct FCA authorisation you can speak to the Illegal Money Lending Hotline on 0300 555 2222.

Or Report a Loan Shark at

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