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Best 10 Payday Loans for Bad Credit For 2020 in UK

Checkout our list of best 10 payday loans for bad credit for 2020 in UK.
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Author: Adam Green
Last Updated: March 26, 2020
Business colleagues having a chat while pointing at a computer screen - Photo by John Schnobrich on Unsplash
Business colleagues having a chat while pointing at a computer screen - Photo by John Schnobrich on Unsplash

When an emergency strikes that calls for urgent cash but you suffer a poor credit history, your options for obtaining credit services grow narrower.

Banks and other lending institutions won’t advance you the much-needed cash even after taking you through the long and unhealthy loan application processes. So who do you turn to, especially in the case of time-sensitive emergencies? The online-based payday loans direct lenders or their loaning apps counterparts.Payday Loans storefront - payday loans

These help you sort your emergencies by advancing you the cash within the shortest time possible – as little as 15 minutes – on the promise that you will repay as soon as your next salary comes in. Unlike high-street banks, these don’t shy away from lending you cash because of a poor credit score.

They will even help you build or rebuild it by submitting information about your timely payments to the credit reference bureaus. And while some still pull your credit score to determine the interest rate for the advanced amounts, some don’t consider it.

You will, however, note that they are a bit stringent with their loan repayment terms. For instance, they will have higher representative Annual Percentage Rates (APRs) compared to your bank, shorter grace period to repayments, and high roll-over or late payment fees. Some may demand that you grant them a Continuous Payment Authorization (CPA) that allows them to deduct their dues directly from your bank account. You are nonetheless protected by the FCA that ensures you don’t pay more than £24 per month on every £100 borrowed or double the loaned amounts.

Table of Contents

    Loan Mr.

    Our Rating

    • Loan starting from £100 to £2,000
    • Representative rate of 49.9% APR
    • Payback period of up to 36 months
    • Offers an extension of your repayment period for a fee
    Note: Bad Credit loans come in handy when you are looking for immediate cash to solve a time-sensitive emergency. Plus, by giving you access to credit services and reporting your repayment progress to the different reference bureaus, these bad credit payday lenders help you rebuild your credit score.

    What is the process of applying for payday loans?

    Step 1: Visit a payday loan lender online, at their store or call them

    Step 2: Apply for the loan by providing the lender with such information as your bank details, contact information, employment status and details, contact information for your references

    Step 3: Agree to the terms of the loan and repayment period

    Step 4: The lender gives you a check for the loan amount or deposits it into your account

    Step 5: You repay the amount upon receiving your salary or ask for a rollover and pay the rollover fees

    What are the pros and cons of payday loans for bad credit?

    Pros

    • They help sort your finances when no one else is willing to help
    • Have a relatively non-intrusive application process
    • Speedy and wholly online loan processing
    • No credit check and may help improve your credit score
    • Doesn’t require security or collateral
    • Short term repayment doesn’t tie you to a lifetime commitment

    Cons

    • Carry a higher APR than most other personal loans
    • Have a short grace period to repayment
    • The easy application process and fast processing of payday loans make it tempt you into its misuse by applying it to sort non-emergency situations

    Reviewer’s choice of best bad credit lenders: Reviewer’s choice

    Reviewers Choice
    Loan Mr.
    Rating
    Rating
    Available Loan Amount
    £100 - £2,000
    Available Term Length
    2 and 36 months.
    Representative APR
    49.9% to 1333% APR
    Min Credit Score
    Nil
    Apply for a Payday Loan Now with Very Merry Loans
    Rating
    Rating
    Available Loan Amount
    100 - 2000
    Available Term Length
    12 Months
    Representative APR
    49.9% to Max 1333%
    Min Credit Score
    Not disclosed
    Heart Paydays
    Rating
    Rating
    Available Loan Amount
    £50 - £2,000
    Available Term Length
    4 - 36 months
    Representative APR
    49.9% and 1333% APR
    Min Credit Score
    Nil
    Viva Loans
    Rating
    Rating
    Available Loan Amount
    £100 - £15,000
    Available Term Length
    2 to 36 months
    Representative APR
    49.9% and 1333% APR
    Min Credit Score
    Nil
    Loan Shuttle
    Rating
    Rating
    Available Loan Amount
    £100 - £5,000
    Available Term Length
    2 to 36 month
    Representative APR
    49.9% to 1333% APR
    Min Credit Score
    Nil

    How we ranked the best payday loans for bad credit:

    • Representative APR
    • Maximum loan amounts
    • FCA regulation and reputation
    • Loan processing speeds
    • Other fees and charges
    • Credit score checking
    • Loan repayment period
    • Customer support

    Best payday loans lenders for bad credit:

    1. Loan Mr | Upto £2000 at 49.9%- 1333% APR

    Loan Mr is an online credit provider marketplace where borrowers can access loans from various lenders. You are allowed to apply for a loan starting from £100 to £2,000 with a representative rate of 49.9% APR. Keep in mind that this rate is just a standard quote; some lenders on the platform may charge as high as 1333%APR depending on your credit profile.

    To balance it out, most loans come with an extended payback period of up to 36 months and 2 months for smaller amounts. On top of it all, you could ask for an extension of your repayment period but be prepared to incur additional charges and interests. Though, your biggest worry should be missed payments as it can be detrimental to your credit score rating in addition to resulting in legal proceedings.

    Our Rating

    • Fast and straightforward loan application process
    • Offers longer repayment period of up to 36 months
    • No collateral security required
    • High interest rates
    • Strict repayment terms

    2. Very Merry | Upto £2,000 at 49.9% to 1333% APR

    Very Merry Loans is a credit platform that links borrowers to potential lenders. The platform is funded by the third-party lenders and as such borrowers aren't charged for using the service. This is done on a commission basis whereby the lenders pay a certain amount to the online broker for every successful loan application.

    The borrowing limit usually falls between £100 and £2,000 with a fair repayment period of 2 to 12 months. If you miss any payment, you will be penalised about £15 in addition to representative APR of between 49.9% and 1333%. Of course, the rates depend on your credit score with some emphasis on your household income.

    Our Rating

    • Higher chances of loan approval as there are numerous lenders on the platform
    • Offers round the clock services even during weekends
    • The broker is licensed by the Financial conduct authority
    • APRs are not consistent since there are different lenders
    • You will incur the monthly subscription of £19.95 after the trial period

    3. Heart Paydays | Up to £2,000 at 49.9% to 1333% APR

    Heart Paydays is a free online credit broker connecting borrowers to reputable lenders. You can borrow a loan starting from £100 to £2,000 payable at an interest rate of 49.9% APR to a maximum of 1333% APR. Depending on the loan amount, you have between 4 months and 36 months to repay failure to which your credit score rating will be affected in addition to the possibility of being denied a loan on subsequent application. In fact, the platform advocates for timely repayment not just for the sake of your credit rating, but also to avoid additional charges and interests associated with missed payments.

    Our Rating

    • Has a friendly customer support
    • Fast loan application process
    • Extended repayment period especially for small amounts of loan - Up to 36 months
    • The platform is a credit broker and not a direct lender
    • Some of the lenders on the platform have strict lending terms

    4. Viva Loans | Up to £2,000 at 49.9% to 1333%

    Much like any other credit broker, Viva Loans connects you to a long list of borrowers who are willing to lend you a larger amount of payday loan than the typical lenders. Here, you can apply for a loan starting from £200 to £2,000 with payback period of between 3 months and 1 year at a rate of 49.9% and 1333% APR.

    Unlike traditional payday loan lenders, who require lump-sum repayments, a good number of lenders on this platform have more flexible repayment plans designed to meet your financial situation. What's even better is that your lenders may choose to overlook your credit score as long as your income is enough to service the loan within the stipulated time.

    Our Rating

    • Offers a higher borrowing limit
    • Has a variety of lenders offering flexible repayment terms
    • The platform is free to use
    • Being a credit broker, the platform shares your information with various lenders, posing a privacy risk
    • Rates and borrowing trends aren't constant

    5. Loan Shuttle | Up to £5,000 at 49.9 to 1333%

    Loan Shuttle is platform that allows you to apply for a loan and then submits your application to a long list of lenders who've partnered with the site. This saves you the hassle of applying for a loan numerous times to individual lenders some of whom might not accept your application. Minutes after filling in your loan application, a lender will respond giving you a quote of the loan limit of between £100 and £5,000.

    The loan is to be repaid within 6 and 36 months at rate of 49.9% or 1333%. You are encouraged to honour payment dates as failure to do so may prompt lenders to use collection services.

    Our Rating

    • Offers an above-market borrowing limit
    • Has a fast and simple loan application process
    • Offers loan regardless of one's credit profile
    • Strict repayment terms
    • The platform is a credit broker and not a direct lender

    6. LoanSkipper | Up to£2,000 at 49.9% to 1333%

    Founded in 2014, Loanskipper has grown to become a popular online credit broker with a pool of reputable lenders offering loans from as little as £100 all the way to £2,000. Depending on your loan amount, you are given a period of 2 to 6 months to pay back the amount plus an interest rate ranging between 49.9% and 1333% APR. Your credit score rating doesn't influence creditors' decision as long as you've got a reliable source of income that can service the loan.

    Our Rating

    • Allows you to compare a variety of lenders and choose the one with the most favourable terms
    • The platform is registered and licensed by a regulatory body - FCA
    • Loans are approved quickly and in a timely manner
    • Short repayment period
    • Charges a fee for using the service

    7. Uncle Buck | up to £1,000 at 1249.2% APR

    Uncle Buck is not just one of the most established but also a highly reputable payday loan direct lender to individuals with bad credit. Started in 2004, the online-based company will give a first-time borrower up to £1,000 pounds with a friendly and extended repayment period of up to 6 months. The lender is FCA regulated meaning that it abides with the Authority’s loan pricing regulations.

    It also maintains one of the most straightforward loan application processes where you only need to head over to their website and fill in your details and the required loan amounts. And to qualify for a loan here you will need to be a permanent UK resident above 18 years and in salaried employment. You will also need a salary bank account and you should not be in debt management or have filed for bankruptcy.

    Our Rating

    • Fast loan processing – less than 15 minutes
    • No credit score check
    • No loan collateral required
    • One may consider their £1,000 maximum lending relatively low

    8. Satsuma | up to £1,000 at 1294.3% APR

    Satsuma makes it to this list not just because of its rich history in the lending business but also due to its flexibility of repayments it awards its clients. Here, you can borrow up to £1,000 and choose a repayment period of between 3 and 12 months. And unlike most payday loan service providers that demand monthly payouts, Satsuma offers you a weekly, monthly, and bulk payment options.

    It also has an innovative screening platform – SmartCheck – that lets you check the loan approval requirements and confirm if your loan will be approved before you apply. You can complete the entire payday loan for bad credit application online and have the cash deposited to your account within 1 hour after approval and if you repay earlier, the direct lender will discount the interest.

    Our Rating

    • Maintains highly flexible loan repayment terms
    • The SmartCheck feature helps you tailor your application for higher chances of approval
    • Lets you save on interest for early repayments
    • Low maximum loan advance

    9. Lending Stream | up to £1,500 at 1333% APR

    The maximum payday loan amounts you will get from Lending Stream if you suffer a bad credit score for your first application is £800. This will, however, improve gradually for every successive application to the direct lender’s £1,500 maximum.

    Some of the upsides of settling with Lending Stream for your pay loan application include the fact that they have a friendly repayment policy that allows you to repay the borrowed amounts within six months, and you also get to save on interests and all other associated fees if you make early payments. The loan application process is also relatively straightforward and you will have the cash within minutes after loan approval.

    Our Rating

    • A straightforward loan application process
    • Overlooks your credit score in assessing your eligibility
    • Friendly and extended loan repayment periods
    • One may consider the £800 maximum loan amounts low

    10. Peachy | up to £1,000 at 947% APR

    We like Peachy because they have some of the lowest interest rates plus they also maintain one of the most extended loan repayment periods. Unlike most payday lenders that call for high repayment amounts and short periods, this FCA regulated direct lending company allows you to stretch the loan repayment period to between 15 days and 12 months.

    Their loan amounts range from £100 to £1,000 and this amount will be processed within an hour once approved. The loan can be applied online in a seamless 4-step process that starts with filling in your personal details, contact information, employment and then financial details.

    Our Rating

    • Friendly and extended loan repayment schedules
    • Fast loan processing and cash transfer
    • Early payments save you interest and associated costs
    • Early payments save you interest and associated costs

    How can you increase your chances of getting approved for payday loans with bad credit?

    I. Only apply to loans you meet the qualifying criteria for

    The surest way of maximizing the possibility of having your bad credit payday loan being approved is applying to loans that you qualify for. After settling on one or a host of payday loan providers, proceed to check their eligibility criteria and ensure that you qualify. This involves checking such factors as the minimum monthly salary and age requirements.

    II. Pay off current loans

    You will also want to first clear any other loans, payday or otherwise that you may be having with same or another credit service provider. Applying to multiple loans when you already have a bad credit history says volumes about your financial planning and this may scare off potential lenders.

    III. Provide valid and updated information

    Most online-based bad credit payday loan service providers operate on a strict code of trust and transparency when it comes to customer verification. You might want to consider this when filling your registration details or turning in your loan application as simple discrepancies in what you provide and publicly available records may see you disqualified.

    IV. Ensure you pass the identity verification and fraud checks

    The bad credit payday loan provider may have mentioned that they won’t conduct a credit score check but this doesn’t mean that they don’t conduct a background search on you. They will first check with the publicly available voters register to confirm your identity. It is therefore imperative that you ensure that the details provided to the lender matches the publicly available records.

    V. Check the lenders minimum and maximum loan amounts

    Most payday lenders will always indicate the minimum and maximum loan amounts they can provide an individual with a bad credit score. Some will even specify the loan amounts available to first-time applicants. If, for instance, 247 Moneybox has their first-time loan applicant maximum set at £80, it doesn’t help to make a £100 application with the lender.

    Factors to consider before applying for a payday loan with bad credit:

    Google search results for Payday loans UK

    • Fees and charges: The Financial Conduct Authority is quite specific when it comes to capping the fees and charges imposed by the bad credit payday lenders. Ensure that your preferred payday loan provider is FCA loan-price regulation compliant.
    • APR: The Annual Percentage Rate of a loan takes into account the interest and other associated charges charged on a loan. You are better going for the payday loan lender with the lowest/most affordable APR.
    • Possibility of an extended repayment period: Theoretically, the payday loan is supposed to help carry you until the next payday at which time it should be paid in full. Some bad credit payday lenders are however empathetic to your situation and allow extended repayment periods where the loan is spread and paid during several paydays.
    • Credit score checking: If possible go for the ‘No-Credit Check’ payday loan providers. This is because every time a lender pulls your credit score record, they leave a digital footprint that other lenders may use to deny you loans especially if the case of multiple checks in a short period.
    • Reporting to the credit referencing bureaus: You should also only go for a bad credit payday lender who helps you build or rebuild your credit score. Ensure that they explicitly promise to share your stellar loan repayment record with the referencing bureaus.

    Bottom line

    A bad credit score should no longer be a hindrance to loan access, especially in the case of time-sensitive cash emergencies. The bad credit payday loan lenders are out to make this a reality by advancing loan services to different individuals irrespective of their current credit rating. When assessing your eligibility for payday loans, these brands look into more than just your credit score and credit history. Some don’t even pull out your credit record but still help you build a credit history if you don’t have one or rebuild a negative one by reporting your loan repayment progress to the credit reference bureaus, effectively helping you gain access to better loan services and high street lenders in future. Some of the upsides of these payday bad credit references are the fact they have some of the fastest loan application and processing services. But this is a double-edged sword seeing that without proper financial discipline, you will end up hooked onto these expensive loans –especially when you rely on them for non-emergencies.

    Loan Mr.

    Our Rating

    • Loan starting from £100 to £2,000
    • Representative rate of 49.9% APR
    • Payback period of up to 36 months
    • Offers an extension of your repayment period for a fee

    Glossary of emergency loans

    Credit Score

    A credit score shows your creditworthiness. It's primarily based on how much money you owe to loan or credit card companies, if you have ever missed payments or if you have ever defaulted on a loan.

    Guaranteed Approval

    Guaranteed Approval is when, no matter how bad, your credit score its, your loan application will not get declined.

    Credit Limit

    A Credit Limit is the highest amont of credit a lender will lend to the borrower.

    Collateral

    Collateral is when you put up an item against your loan such as your house or car. These can be repossessed if you miss payments.

    Cash Advance

    A Cash Advance is a short-term loan that has steep interest rates and fees.

    Credit Rating

    Your Credit Rating is how likely you are to fulfill your loan payments and how risky you are as a borrower.

    Fixed Interest Rate

    Fixed Interest Rate is when the interest rate of your loan will not change over the period you are paying off you loan.

    Interest

    The Interest is a percentage based on the amount of your loan that you pay back to the lender for using their money

    Default

    If you default on your loan it means you are unable to keep up with your payments and no longer pay back your loan.

    Late Fee

    If you miss a payment the lender will charge you for being late, this is known as a late fee.

    Unsecured Personal Loan

    An Unsecured Personal Loan is when you have a loan based solely on your creditworthliness without using collateral.

    Secured Loan

    A Secured Loan is when you put collateral such as your house or car up against the amount you're borrowing.

    Prime Rate

    This is the Interest Rate used by banks for borrowers with good credit scores.

    Principal

    The Principal amount the borrower owes the lender, not including any interest or fees.

    Variable Rate

    A Variable Rate is when the interest rate of you loan will change with inflation. Sometimes this will lower your interest rate, but other times it will increase.

    Installment Loan

    An Installment Loan is a loan that is paid back bi-weekly or monthly over the period in which the loan is borrowed for.

    Bridge Loan

    A Bridge Loan is a short term loand that can last from 2 weeks up to 3 years dependant on lender.

    AAA Credit

    Having an AAA Credit Rating is the highest rating you can have.

    Guarantor

    A Guarantor co-signs on a loan stating the borrower is able to make the payments, but if they miss any or default the Guarantor will have to pay.

    LIBOR

    LIBOR is the London Inter-Bank Offered Rate which is the benchmarker for the interest rates in London. It is an average of the estimates interest rates given by different banks based on what they feel would be the best interest rate for future loans.

    Home Equity Loans

    Home Equity Loans is where you borrow the equity from your property and pay it back with interest and fees over an agreed time period with the lender.

    Debt Consolidation

    Debt Consolidation is when you take out one loans to pay off all others. This leads to one monthly payment, usually with a lower interest rate.

    Student Loan

    If you obtain a Student Loan to pay your way through College then you loan is held with the Department for Education U.K.

    Student Grants

    Financial Aid in the form of grants is funding available to post-secondary education students throughout the United Kingdom and you are not required to pay grant

    FAQs

    What is a bad credit payday loan?

    This refers to a short term loan service advanced to individuals with a bad credit score based on salary income. In most cases, the amount advanced is only a percentage of the individual’s monthly salary and is supposed to be paid back during the next payday.

    Must I settle the full loan amount during the next payday?

    In theory, YES. The bad credit payday loan should be paid back immediately the next salary check clears. However, most payday loan lenders have embraced more flexible payment terms and offer extended payday loan repayment periods based on the amounts advanced. On our list of best bad credit payday loan providers, Peach has the shortest repayment period at 15 days while On Stride Financials has the most extended repayment period of 3 years.

    How long does it take for the payday loan to be approved and deposited into my account?

    Different payday loan direct lenders have different approaches to loan processing. They, however, are faster than conventional banks and will almost always process all loan applications during the same day they were accepted and deposit cash into your account within minutes – average 15 minutes – of loan approval.

    What are the maximum amounts I can get for a bad credit payday loan?

    The maximum amounts you can get for a bad credit payday loans vary from one institution to another. Some have a solid limit to what they can advance a first-time applicant while others don’t. The bottom line to either is that if you are looking for higher loans, you must prove your ability to repay in the form of solid salary income and no other debt obligations.

    Will my bad credit payday lender run a credit score check?

    Check through the fine print of the bad credit lenders loan terms to see if they explicitly commit to not pulling out your credit score report. Note that this is different from the statement ‘we don’t just consider your credit score in determining your eligibility for a payday loan’ as most will still conduct a soft credit score check.

    Can timely bad credit payday loan repayment help improve my credit score?

    Yes. Note that even though most bad credit payday loan service providers will lay too much emphasis on your credit score when determining your eligibility, most will help you rebuild your bad score or build a new one if you don’t have any by sharing your loan and repayment information with the bureau.

    What are the most common causes of bad credit?

    A bad credit score is primarily as a result of two primary factors. Firstly, it can be as a result of past financial mistakes like delayed loan repayments or failure to repay altogether and that’s where rebuilding comes in as you are trying to salvage your already soiled borrowing habits. Secondly, it can be as a result of a lack of debt history. You are considered to have a bad credit score history if you have never borrowed loans and banks aren’t sure about your borrowing history and thus the term ‘building’ a credit score.

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    Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.