The 5 Best Small Loans for a Bad Credit Rating 

If you are looking to borrow a small amount of money over a short period of time, keep your risks down to a minimum by taking a look at our guide of the top 5 cheapest and best options.

Putting your trust in some of the more obvious options can often be a risky and expensive proposition.

Fortunately, other alternatives exist and below we will help to shine a spotlight on some of the best.

Loan No. 1: Turn to your Overdraft

Many people shy away from extending their overdraft for fear of increased charges. However, if you are only looking to access a relatively small amount of money over a short period of time, speaking to your bank about extending your overdraft can offer an ideal solution.

Assuming that you do everything possible to ensure that you do not go over your agreed limit, you will be able to access a far cheaper alternative when compared to some of the other options current available.

Warning – Avoid charges, they can be even worse than a payday loan!

We cannot emphasise strongly enough that you should under no circumstances go over your agreed limit as charges can often be as much as £6/day or £35 per item!

Take a moment to check out the following article as Martin Lewis offers invaluable insight regarding why overdraft charge APRs dwarf other options.

The bank deal that makes 5,000% APR payday loans look cheap

Loan No. 2: Credit Card

credit cardsAnother common school of thought is that increasing credit card debt is the last thing that you should do but if you have an existing card with some available space, this may offer another great method of accessing short term cash.

If you are after quick cash, these will probably not offer a suitable option. Applications can often take up to a month and even then there is no guarantee the application will be successful. 

Approach with Caution – Credit card debt is one of the main contributors to debt problems in the UK and according to the Money Charity, in April 2013, the nation’s total card debt stood at £55.3 billion.

Therefore as with all debt, you should always seek to repay card balances at the earliest possible opportunity.

Step Change offer some excellent advice for combating card debt in the following article:

Credit card debt | Help & advice | StepChange (CCCS) – debt charity

Loan No. 3: Interest Free Loans

Often thought of as a myth but there exists a small possibility that if you are currently receiving income-based benefits (income support, pension credit or jobseeker’s allowance for example), you may be able to get an interest-free option of up to £1,500 from your local council.

Only intended for use with essential items such as rent, furniture, clothing or debt repayments. This type of finance is typically available for up to 2 years with repayments being calculated on an individual basis.

How to apply: Apply at the Jobcentre or download the form on

Please Note – Councils are very strict on who they offer financial assistance to. Contact your local council to find out its procedure.

Loan No. 4: Borrowing from Family and Friends

For a variety of reasons (often pride or embarrassment) borrowing from family or friends is often the last option that we explore.

However, as uncomfortable as we often imagine it will be, this option can often be the best one available as it can bring borrowing costs down to almost nothing.

Loan 5: Guaranteed Options

Disposable income and savings can be pretty thin on the ground for many people and even if family and friends would love to lend you the money, they may not be in a position to do so personally. However some middle ground is available.

Guaranteed loans  require the backing of a third party (typically a family member or close friend) with a good credit history of their own.

Because the third party will be obliged to pick up the repayments should you fail to make them, the lender is prepared to see past your credit history, so long as your guarantor has a clean file.

Please Note – This option can be up to 10 times cheaper than a payday loan!

Staying on top of your Credit Rating

If you’re already at your limit with overdrafts (and can’t extend), and have maxed out your credit card, then consider getting help with your debts.

We also strongly advise keeping a regular check on your credit rating. Paying a visit to Checkmyfile by clicking here will offer you a number of options to access the UK’s only multi-agency report.

Check My File
See more than twice the information compared to any other Credit Report in the UK

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A Loan Could be at your Fingertips

If you have the backing of someone close, exploring the guaranteed borrowing options available to you could offer the perfect solution to your financial problems.

Simply use our calculator below to work out how much you can afford to borrow and submit your details to receive a range of offers from the UK’s best bad credit lenders.

Return to Short Term Finance

Helping you to find the right option

  1. Bad financial history OK

  2. Affordable rates and fees

  3. Fast application and payout

  1.   One application to multiple lenders
  2.   No broker or application fees
  3.   No early redemption fees
  4.   Secure online application

how much

Quick application for £50 to £12,000
no risk free
  • No credit checking*
  • No obligation to complete the application
  • No application fees
  • Secure online application

4 Easy Steps

1. Calculator

Calculate how much you can afford to borrow and for how long

2. Easy Online Form

One quick online form to our panel of multiple lenders

3. Multiple Offers

Receive a choice of no obligation offers from multiple lenders

4. Get Your Money

Send off your preferred offer and get your cash

Save time with one easy online form

Why spend time filling out lots of different forms to numerous lenders?

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With us you just fill out one easy form

Borrowing + interest & fees of = Total to repay
* Based on repaying after 30 days

Borrowing over your repayments will be approx. per month and in total. For actual figures hit Get My Loan to get a choice of free, no obligation loan offers from the best bad credit loans lenders in the UK.