Short Term Loans for Bad Credit – Discover Lending Stream

If you’re looking for short term loans but have bad credit, don’t worry, you’ve still got options. There are a lot of direct lenders you could turn to who look at more than just your credit score. But how do you know if a short term loan is best for you?

To answer to this question, keep reading. We’ll tell you everything you need to know about short term loans for bad credit. We’ll also tell you what you need to apply for a short term loan, even when you’ve got a poor credit rating.

What are Short Term Loans for Bad Credit?

Short term loans for bad credit are exactly what they say they are – loans for people with a poor credit rating. They tend to be for smaller amounts of money that are paid back within 6 – 12 months.

Short term bad credit loans are helpful when you need money fast, when you’re faced with an unexpected bill.

You don’t need to involve anyone else to guarantee that the loan will be repaid. And you don’t need to have an asset to take out a short term loan. But as part of the application process, you’ll need to be able to prove that you can afford the repayments.

How do Short Term Bad Credit Loans Work?

Short term bad credit loans work in much the same way as any other type of loan. You fill out an application with a lender and, if approved, you receive the money you need. You then pay it back in equal monthly instalments.

The providers of short term loans understand that people’s credit score can take a hit from time to time. It’s life and it happens to many of us. But that doesn’t mean people with bad credit are unreliable when borrowing money. Lenders offering short term loans to people with bad credit look at more than just their credit score. It’s how they try to help these people when they really need it. 

Can I Get a Short Term Loan with Bad Credit?

Yes, most people with bad credit can still apply for a short term loan. The way to find out if you can get one is to make sure you’re eligible first. This means you have to meet the lender’s criteria which could include the following:

• Be a UK resident
• Be over 18 years old
• Have a regular income
• Have a UK bank account

How Can I Check My Eligibility for a Short Term Bad Credit Loan?

To check that you’re eligible to apply for a short term loan, there are two approaches you can take.

1. Go Straight to the Lender

You can go straight to the lender you want to borrow from and find out from them. What you need to be eligible will be found on their website. When borrowing with a direct lender you know who you’re dealing and can get straight answers.

Lending Stream are a direct lender offering short term loans.

2. Use a comparison website

Comparison websites will look at the eligibility criteria of many lenders. You enter your information, and they’ll look to see which lenders are right for you. A soft search may be done to verify you, but this won’t hurt your credit score.

How Much Can I Borrow?

You can borrow from as little as £50 to as much as £5,000. You need to work out how much you want to borrow first as this will impact who you apply with. Some lenders will have minimum loan amounts. This means if you only want a small amount, choose a lender that lets you borrow just that amount. It’s not a good idea to agree to repay more than you need to borrow.

With Lending Stream, you can borrow £50 to £800 if you’re a first time borrower. Existing customers can borrow up to £1,500.

What are the Repayment Terms on Short Term Loans with Bad Credit in UK?

The repayment terms on short term loans are, as the name suggests, short! They tend to range from 3 to 12 months. But you may find some lenders who’ll let you pay back your loan over a term of up to 3 years.

Some lenders will give you choice of how many months you need to pay it back. This allows you to budget so you can afford the repayments. But the longer you spend paying back your loan the more you’ll end up paying in interest. Make sure you understand the costs involved with the loan you apply for.

What Credit Score is Needed for a Bad Credit Short Term Loan in UK?

There’s no set credit score that you need to qualify for a short term loan for bad credit. Each lender will have their own criteria they’ll use when assessing your application. This means your credit score might be acceptable to one lender but not to another.

It might sound obvious but the higher your credit score, the better your chances of getting approved. And a higher credit score will mean you’re more likely to be offered a lower the interest rate.

How Can I Improve My Credit Score?

There are things you can do to improve your credit score. Here are some tips to help you.

1. Check Your Credit Report

Have a look through your credit file at what’s been reported. Make sure there are no errors on there. You can check your credit report with the three main credit reference agencies in the UK. These are:

• Experian
• Equifax
• TransUnion

Make sure that all your details are correct. For example, an error in your address could stop you from being approved for a loan.

2. Make all Your Repayments on Time

Making all your repayments on time can make a big difference to your credit score. Paying back your debts when they’re due shows lenders that you’re reliable. It shows them that you manage your money well.  

If you’ve missed any payments or have been late making them, bring them back up to date as soon as you can. Then always keep on top of them.

3. Keep Your Credit Card Balances Low

Lenders prefer it when you’re not borrowing up to your credit limits. It shows them that you’re good at managing your money. A good amount to borrow would be around 30% of your total credit limit.

4. Register on the Electoral Roll

If you’re not registered to vote, then get yourself signed up. It’s a quick way to boost your credit score. By getting added to the electoral register, your credit score will go up. It’s an easy way to improve your credit score.

Can I Get a Short Term Loan for Bad Credit Without Credit Check?

The short answer to this question is no. Lenders in the UK that are registered with the Financial Conduct Authority (FCA) must follow their rules. This means that when you apply for a short term loan, the lender must carry out a credit check. It’s part of the process of checking that you’re not over committing yourself to too much debt.

If you find a lender that offers you a loan without a credit check, read the terms of the loan. Don’t let the idea of getting easy money get you into a situation you later regret.

What are the Advantages and Disadvantages of a Short Term Loan with Poor Credit?

There are good and bad points to having a short term loan when you’ve got bad credit.

What are My Options if I Have Bad Credit?

If you have bad credit, there are still options available to aside from a short term loan. We’ve listed the main ones below.

1. Bad Credit Personal Loans

Personal loans tend to let you borrow more money and have longer repayment terms. If you’ve got bad credit, you’ll have fewer lenders to choose from for this type of loan.

2. Payday Loans

Payday loans offer smaller amounts of cash over a very short term. They’re helpful if you’ve got bad credit and need a bit of cash to tide you over to your next payday. But they come with very high interest rates.

3. Guarantor Loans

To get a guarantor loan you need someone to agree to be responsible for paying back the loan if you don’t. Guarantors tend to be a family member. These types of loans can help you get a loan if you’ve got a poor credit history. The lender is taking less risk as they’ve got someone else to go to if the loan isn’t repaid.

4. Secured Loans

Secured loans are only possible when you have an asset to secure the loan against. The asset is usually your home, but it can also be your car or jewellery. The asset means the lender has something they can sell to recoup the money if you don’t pay. This makes it easier to be approved if you’ve got a bad credit rating.

You’re more likely to find lower interest rates on secured loans compared to other loans for bad credit.

6. Credit Cards for Bad Credit

Another term for these is credit builder cards. They’re credit cards that are designed for people with a poor credit history. You can use them like a standard credit card to help improve your credit score.

Be mindful that the interest rates will be high, so remember to pay them off when they’re due.

When is a Short Term Loan for Bad Credit a Good Idea?

Short term loans for people with a poor credit rating can be helpful in emergency situations. In those moments when you’re faced with an unexpected bill, a short term loan could help you out. This could be for the following reasons.

• A car repairs.
• A broken home appliance like a washing machine breaking down.
• Being temporarily out of work.

Whatever your emergency, you don’t have to say what you need the money for when you apply. But don’t let this tempt you into borrowing money for something you could live without. A weekend away or a great night out should be saved up for rather than go into debt for.

FAQs – Short Term Bad Credit Loans

Disclaimer: We are not providing financial advice. These are just tips for informational purposes. Also, we are not affiliated to any of the external parties linked here, they are provided for reference only.