10 Best Loans for Bad Credit in UK 2025
Are you finding it difficult to secure a loan due to a poor credit history? You’re not alone. In the UK, many individuals face rejection from traditional lenders because of their credit scores, making it difficult to access funds for emergencies, debt consolidation, or essential purchases. But having bad credit doesn’t mean you’re out of options.
The lending market has evolved, and in 2025, there are several regulated lenders offering tailored financial products to meet the needs of people with less-than-perfect credit.
This blog provides a detailed guide to the best loans for bad credit UK, exploring top lenders, what to consider before applying, and how to increase your chances of approval all while staying financially responsible.
What Is a Bad Credit Loan and Who Needs It?
A bad credit loan is a type of financing designed specifically for individuals who have a low credit score or an insufficient credit history.
These loans are usually offered by specialist lenders who assess more than just your credit score when deciding whether to approve an application.
People who may need bad credit loans typically include those with:
- Missed or late repayments
- County Court Judgements (CCJs)
- Defaults or bankruptcy in their credit file
- No previous credit history (often younger individuals or those new to the UK)
These loans are often used to cover urgent needs such as home repairs, car expenses, or consolidating other high-interest debts.
Why Is It Hard to Get a Loan with Poor Credit in the UK?
UK lenders rely heavily on credit scores and full credit histories to determine the likelihood that a borrower will repay the loan.
A poor score suggests risk and potential repayment issues, leading banks and mainstream lenders to decline applications or offer very high interest rates.
Common credit reporting agencies like Experian, Equifax and TransUnion collect your financial history and provide scoring based on payment habits, credit utilisation, length of credit history, and other factors.
Lenders are cautious because bad credit typically reflects:
- Late or missed payments
- High debt utilisation
- Defaults or bankruptcies
- Limited or no credit history
As a result, borrowers with these markers are seen as high-risk, prompting many banks to avoid lending altogether or set stricter terms, higher APRs, or ask for collateral.
Can You Really Get Approved for a Loan with Bad Credit?
Yes, approval is possible even with a poor credit history, but it often depends on the lender’s criteria, the type of loan, and your ability to demonstrate affordability.
Specialist lenders are more likely to consider applicants with bad credit, especially if they have a stable income or can provide a guarantor.
There are several types of bad credit loans available:
- Guarantor Loans: These involve a family member or friend co-signing the agreement, agreeing to repay the loan if the borrower defaults.
- Unsecured Personal Loans: These don’t require collateral and are typically available for lower loan amounts.
- Secured Loans: Backed by an asset such as a home or vehicle, these may offer lower interest rates but come with the risk of asset loss if repayments are missed.
- Credit Builder Loans: Smaller loans aimed at helping individuals establish or rebuild credit through consistent repayments.
Although interest rates tend to be higher, making repayments on time can positively impact your credit score over time.
What Should You Consider Before Applying for a Bad Credit Loan?
Not all bad credit loans are created equal. Some come with high fees, confusing terms, or poor customer service. Before applying, evaluate the following key aspects:
- Total Cost of Borrowing: Look beyond the interest rate and consider the APR (Annual Percentage Rate), which reflects the full cost of the loan, including fees.
- Loan Terms and Repayment Flexibility: Check whether the lender offers options for early repayment without penalty.
- Application Impact: Choose lenders that offer a soft search tool, which doesn’t leave a mark on your credit report until you formally apply.
- FCA Authorisation: Ensure the lender is regulated by the Financial Conduct Authority, which guarantees consumer protections.
- Affordability Checks: Responsible lenders will assess your income and expenses to ensure you can repay the loan without hardship.
Making informed decisions can prevent a bad credit situation from worsening and can even help you improve your financial standing.
Are Bad Credit Loans Safe and Regulated in the UK?
Yes, if you choose a lender authorised and regulated by the Financial Conduct Authority (FCA).
These lenders must follow strict guidelines regarding transparency, affordability checks, and customer rights. All the lenders featured in this blog are FCA-regulated.
Borrowers should remain cautious of:
- Unregulated online lenders
- Payday loan companies with hidden fees
- Any business offering “guaranteed approval” without checks
Always verify the lender’s credentials through the official FCA Register.
Top 10 Best Loans for Bad Credit in the UK (2025 Edition)
1. Likely Loans / Finio Loans
Although Likely Loans is no longer accepting new customers, their lending model lives on under the name Finio Loans, operated by Oakbrook Finance Ltd.
Finio Loans continues to deliver straightforward, personalised loans specifically designed for people who may not have perfect credit histories.
What Makes Finio Loans Stand Out?
Finio Loans offers unsecured personal loans of up to £5,000, with decisions delivered in minutes and no hidden fees.
Designed for customers seeking quick, responsible lending, it’s a popular choice for various purposes such as home improvements, debt consolidation, car repairs, or even wedding expenses.
The application process is user-friendly and begins with a soft credit check that doesn’t impact your score. Once you’re offered a personalised rate and you choose to proceed, a full credit check is done.
If approved, the funds are usually paid into your account the same day, though it may take up to 5 working days during peak periods.
Representative Example
Borrow £2,000 over 24 months at a fixed interest rate of 39.9% p.a. (representative APR 39.9%). Your monthly repayments would be £116.07, with a total repayable amount of £2,785.68.
| Feature | Detail |
| Loan Amount | Up to £5,000 |
| APR Range | 39.9% – 69.9% |
| Loan Terms | 12 to 36 months |
| Soft Credit Check | Yes (initial eligibility check) |
| Fees | No application or early repayment fees |
| Regulation | FCA-authorised and regulated |
Finio Loans are suitable for UK residents looking for transparent borrowing solutions without the hassle of hidden charges or unclear terms.
2. TSB
TSB offers a highly customisable personal loan option, with a strong emphasis on debt consolidation. It’s especially suited for borrowers who want to bring multiple debts under one roof and make repayments simpler and potentially more affordable.
Who Should Consider a TSB Loan?
TSB’s loans are ideal for individuals with reasonable credit who may not qualify for high-street lending due to past financial issues but have no recent defaults or bankruptcies.
TSB also provides longer terms and higher borrowing limits for its existing current account customers.
Borrowers can access between £1,000 and £25,000 (up to £50,000 for current account holders), with repayment terms ranging from 1 to 5 years (7 years for existing customers).
Applications are assessed quickly, and the soft credit check used in the quote process won’t affect your score.
Eligibility Requirements
- Be a UK resident
- Aged 18+ (21+ if applying online)
- Regular income of at least £850/month after tax
- No recent CCJs, credit defaults, or bankruptcies
- Up to date with any existing TSB borrowing
| Feature | Detail |
| Loan Amount | £1,000 – £25,000 (£50,000 for customers) |
| APR | Personalised (depends on profile) |
| Loan Term | 1 – 5 years (up to 7 years for customers) |
| Decision Time | Minutes |
| Regulation | FCA-authorised |
TSB remains a stable choice for UK borrowers who want trusted service, flexible options, and competitive terms with the added credibility of a traditional bank.
3. Evlo Loans
Evlo Loans is a direct lender focused on helping individuals with bad credit or thin credit files access fair and regulated personal loans. They are known for their high acceptance rates for applicants with less-than-perfect financial histories.
Tailored for Bad Credit Borrowers
Evlo offers loans from £1,000 to £15,000, repayable over 18 to 60 months. One of the standout features is their use of soft credit checks during the initial application, which means checking eligibility doesn’t impact your credit score.
A full credit check is only conducted once you agree to proceed with a formal application.
Evlo is particularly supportive of those who’ve faced past credit challenges, such as defaults or missed payments. They use a broader set of criteria, including current affordability and financial stability, rather than relying solely on your credit score.
Representative Example
Borrow £3,000 over 24 months at a fixed interest rate of 71.3% p.a. (representative APR 99.9%). You’ll repay 24 monthly instalments of £237.75. Total repayable: £5,706.
| Feature | Detail |
| Loan Amount | £1,000 – £15,000 |
| APR Range | 30.5% – 299.8% |
| Representative APR | 99.9% |
| Loan Term | 18 to 60 months |
| Soft Credit Check | Yes |
| Regulation | FCA-authorised, direct lender |
Evlo offers a viable alternative for borrowers who have been overlooked by mainstream financial institutions but still need reliable and transparent borrowing.
4. Asda Money (via Aro)
Asda Money, in partnership with Aro, provides a powerful loan comparison service for individuals with poor credit histories. Unlike direct lenders, Aro is a credit broker that works with a panel of trusted UK lenders to help you find suitable loan options.
Why Choose Asda Money’s Loan Comparison Tool?
Through a single application, applicants can compare offers from multiple FCA-regulated lenders without affecting their credit score. The platform matches you to suitable loans even if your credit profile is weak or inconsistent.
Loan types available include:
- Personal Loans: Ideal for flexible, unsecured borrowing with manageable monthly repayments.
- Secured Loans: Allow you to borrow against property or assets, often with lower interest rates.
- Guarantor Loans: Require a second person to co-sign the loan, increasing approval odds.
Representative Example
APR: 29.7% (varies depending on lender and product). Terms, conditions, and loan limits will depend on the matched lender.
| Feature | Detail |
| Loan Amount | Varies (based on matched lender) |
| APR Range | Typically from 29.7% |
| Loan Types | Personal, Secured, Guarantor |
| Credit Impact | Soft check only |
| Regulation | FCA-authorised brokers and lenders |
While Asda Money itself is not a lender, the ability to compare multiple regulated options through one platform makes it an excellent starting point for borrowers with bad credit.
5. Drafty
Drafty provides a revolving line of credit, not a traditional loan, which gives customers flexibility to borrow only what they need, when they need it. This makes it an ideal alternative to payday loans for those with unpredictable expenses or bad credit.
How Does It Work?
With Drafty Flex, you can borrow between £50 and £3,000, and only pay interest on the amount actually used. The credit line works like a flexible overdraft or credit card—borrow, repay, and reuse as needed.
For those looking for more structure, Drafty also offers fixed loans between £1,000 and £3,000, repayable over 12, 18, or 24 months with fixed monthly repayments.
Representative Example – Line of Credit
Borrowing £100 for 30 days costs £5.70. Representative APR: 96.2% (variable).
Representative Example – Loan
Borrow £1,000 over 18 months at 59.9% p.a. (fixed), with monthly payments of £85.56. Total repayable: £1,540.08. Representative APR: 79.9%.
| Feature | Detail |
| Credit Line Amount | £50 – £3,000 |
| Fixed Loan Amount | £1,000 – £3,000 |
| Repayment Term | 12 to 24 months (for fixed loans) |
| APR (Variable) | 79.9% to 96.2% |
| Decision & Payout Speed | Approval in minutes, funds in 90 seconds |
| Credit Score Impact | Soft check for eligibility |
Drafty is ideal for borrowers who prefer on-demand borrowing and want to avoid the rigidity of fixed loan structures, particularly when facing urgent expenses.
6. Bamboo Loans
Bamboo Loans stands out for its fast and transparent personal loans tailored to people with limited or poor credit histories.
As a direct FCA-authorised lender, Bamboo focuses on responsible lending and clear terms, making it a reliable choice for borrowers who value straightforwardness.
Why Choose Bamboo?
Bamboo offers loans ranging from £2,000 to £15,000, with terms of 12 to 60 months. Their online application is simple and begins with a soft credit search that won’t impact your credit score.
If approved, you’ll receive your rate and a breakdown of costs instantly, including monthly repayments and the total repayable amount.
Their commitment to customer service is reflected in their no-fee policy; there are no charges for early repayment, late payments, or application processing.
They also offer loyalty benefits in the form of top-up or repeat loans for existing customers, allowing you to refinance or increase your loan amount when needed.
Representative Example
Borrow £2,500 over 24 months. Interest rate: 41% p.a. (fixed). Monthly repayment: £154.32. Total repayable: £3,703.74. Representative APR: 49.7%.
| Feature | Detail |
| Loan Amount | £2,000 – £15,000 |
| Loan Term | 12 to 60 months |
| APR Range | 26.9% – 49.7% |
| Credit Impact (Initial) | No impact unless fully applying |
| Fees | No fees at all |
| Loyalty Benefits | Top-up and repeat loans available |
| Regulation | FCA-authorised direct lender |
Bamboo’s simple online process and commitment to fee-free lending make it one of the most customer-friendly lenders for people seeking mid-sized personal loans with manageable repayments.
7. 118 118 Money
118 118 Money provides unsecured personal loans tailored for customers with a less-than-perfect credit history. Their service is particularly designed for those who might be overlooked by high street banks due to past credit difficulties.
What Sets 118 118 Money Apart?
Customers can borrow between £1,000 and £5,000, with loan terms ranging from 12 to 36 months. The loans are non-guarantor, fixed-rate products, so there’s no need to involve a third party, and monthly payments remain the same throughout the term.
The application process includes a soft credit check during the eligibility stage, which helps borrowers understand their chances without harming their credit file.
118 118 Money reviews each applicant on an individual basis, making it possible to get approved even with poor credit, provided you can afford the repayments.
Representative Example
Borrow £2,000 over 24 months at a fixed interest rate of 41.2% p.a. Monthly payments: £123.64. Total repayable: £2,967.43. Representative APR: 49.9%.
| Feature | Detail |
| Loan Amount | £1,000 – £5,000 |
| Loan Term | 12 – 36 months |
| APR | Representative 49.9% |
| Type | Unsecured, non-guarantor |
| Credit Check (Initial) | Soft search only |
| Repayment Type | Fixed monthly instalments |
| Regulation | FCA-authorised lender |
118 118 Money is a practical choice for individuals looking to finance a vehicle repair, consolidate debt, or fund a necessary purchase without needing a guarantor or secured asset.
8. Lendable
Lendable is an online lender offering fast, fair personal loans with a high level of customer satisfaction. Their process is 100% digital, with instant decisions and competitive interest rates tailored to your credit profile.
Why Consider Lendable?
Loans range from £1,000 to £25,000, with repayment terms of 1 to 5 years. Lendable’s standout feature is its rate preview tool, which lets you see your rate before you formally apply, without affecting your credit score.
This feature allows customers to shop confidently without fear of damaging their credit profile.
The interest rates offered depend on your credit status, but even customers with a “limited” or “fair” rating can receive approvals, albeit at higher APRs.
Their system is transparent, fast, and FCA-regulated, making it suitable for borrowers seeking both speed and clarity.
Representative Example
Borrow £7,500 over 36 months. Monthly repayments: £301.36. Fixed interest rate: 23.5%. Total repayable: £10,849.10 (includes loan fee of £465). Representative APR: 29.1%.
| Feature | Detail |
| Loan Amount | £1,000 – £25,000 |
| Loan Term | 1 – 5 years |
| APR Range | 9.9% – 49.9% |
| Loan Fee | Included in total repayable |
| Application Type | Online, instant decision |
| Credit Impact (Initial) | No impact until full application |
| Regulation | FCA-authorised direct lender |
With its flexible structure and fair approach, Lendable is well suited to borrowers who want transparency, speed, and tailored options.
9. Dot Dot Loans
Dot Dot Loans offers quick personal loans for short to medium-term borrowing needs. It is operated by Shelby Finance Ltd., a subsidiary of Morses Club, and provides access to funds for those with weak credit profiles.
How Dot Dot Loans Works?
Borrowers can access £100 to £5,000, with repayment periods from 1 to 36 months. The application involves a soft credit search to match you with a suitable lender without affecting your score. If you choose to proceed, a full credit check is performed.
Their process is entirely online, providing an instant decision after you complete the 2-minute application. It’s ideal for emergency expenses like utility bills, home repairs, or medical costs, especially for those with a history of being declined elsewhere.
Representative Example
Borrow £1,000 over 18 months. 17 monthly payments of £87.22, final payment of £87.70. Total repayable: £1,570.44. Interest: £570.44. APR: 79.9%.
| Feature | Detail |
| Loan Amount | £100 – £5,000 |
| Loan Term | 1 to 36 months |
| APR Range | 12.9% – 1721% |
| Application Process | Instant, soft search initial check |
| Repayment Type | Fixed monthly repayments |
| Regulation | FCA-authorised |
Dot Dot Loans offers a valuable solution for smaller borrowing needs, providing fast access to funds and a simple repayment structure even if your credit score isn’t ideal.
10. WageDayAdvance
WageDayAdvance is a loan broker that connects borrowers with payday and short-term lenders offering up to £5,000. They specialise in bad credit lending and are known for instant decisions and same-day payouts.
What to Expect?
WageDayAdvance is not a lender; they operate as a broker and do not make direct lending decisions. Instead, they quickly scan a panel of FCA-regulated lenders to match borrowers with options based on affordability, credit history, and loan needs.
Loan terms range from 1 to 36 months, and you can choose how much to borrow and how long you want to repay it. Their service includes an eligibility check that won’t affect your credit score.
Once matched with a lender, the borrower is directed to the lender’s site to complete the application.
Representative Example
Borrow £1,000 for 18 months. 17 monthly repayments of £87.22 and a final payment of £87.70. Total repayable: £1,570.44. Interest: £570.44. APR: 79.5% (variable).
| Feature | Detail |
| Loan Amount | £100 – £5,000 |
| Loan Term | 1 – 36 months |
| Application Type | Broker with instant lender match |
| APR Range | 12.9% – 1721% |
| Same-Day Payout | Possible upon lender approval |
| Credit Check (Initial) | Soft search |
| Regulation | FCA-authorised broker |
WageDayAdvance offers a convenient route to payday and short-term loans for customers with poor credit, providing instant access to multiple offers through a single application.
Comparison Table: Best Loans for Bad Credit UK 2025
| Lender | Loan Amount & Term | Representative APR | Key Feature |
| Finio Loans | £500 – £5,000, 12–36 months | From 39.9% to 69.9% | No fees, soft credit check, fast decision |
| TSB | £1,000 – £25,000 (up to £50,000), 1–7 years | Varies by profile | Ideal for debt consolidation with flexible terms |
| Evlo Loans | £1,000 – £15,000, 18–60 months | 99.9% | Accepts poor credit, soft check, direct lender |
| Asda Money (via Aro) | Varies (via panel), variable terms | From 29.7% | Compares options across multiple lenders for bad credit |
| Drafty | £50 – £3,000 (flexible), or £1,000 – £3,000 (fixed) | 79.9% – 96.2% (variable) | Flexible credit line with instant access to funds |
| Bamboo Loans | £2,000 – £15,000, 12–60 months | 49.7% | No fees, loyalty options, fast approval |
| 118 118 Money | £1,000 – £5,000, 12–36 months | 49.9% | Unsecured loans with fixed repayments and no guarantor |
| Lendable | £1,000 – £25,000, 1–5 years | From 9.9% to 49.9% | Instant quote with no credit impact, digital process |
| Dot Dot Loans | £100 – £5,000, 1–36 months | 79.9% (up to 1721%) | Soft search, fast matching with suitable lenders |
| WageDayAdvance | £100 – £5,000, 1–36 months | 79.5% (variable) | Broker for payday and short-term loans, bad credit accepted |
Conclusion: Choosing the Right Bad Credit Loan in the UK (2025)
Finding the right loan when you have bad credit can be challenging, but it’s far from impossible. The UK market in 2025 offers a diverse range of regulated lenders and brokers catering specifically to individuals with poor or limited credit histories.
Whether you need a flexible line of credit, a structured personal loan, or a quick short-term solution, there are trustworthy options available.
The key is to focus on transparency, affordability, and lender credibility. Always check for FCA regulation, avoid any hidden fees, and choose a product that fits both your financial needs and repayment capacity.
With responsible borrowing and consistent repayments, these loans can even help rebuild your credit over time.
FAQs About Bad Credit Loans in the UK
Can I get a loan in the UK if I have bad credit?
Yes, several lenders specialise in offering loans to individuals with poor credit scores, though interest rates may be higher.
Will applying for a bad credit loan hurt my credit score?
No, most lenders perform a soft credit check at the eligibility stage, which doesn’t impact your score.
What is a soft credit check?
A soft check is a preliminary review of your credit file that doesn’t leave a mark visible to other lenders.
Can I repay a bad credit loan early?
Yes, many lenders like Bamboo and Finio Loans allow early repayment without penalties.
Are payday loans the same as bad credit loans?
No, payday loans are short-term and often very expensive. Bad credit loans are broader and can include more affordable, longer-term options.
Is it better to apply through a broker or a direct lender?
Brokers offer multiple options in one application, while direct lenders deal with you personally. Both can be effective depending on your needs.
Can a bad credit loan help improve my credit score?
Yes, making consistent, on-time repayments can improve your credit rating over time.
