Best Bad Credit Loans UK 2025 – Top Lenders Compared

Having a poor credit score, CCJs, or past defaults doesn’t mean borrowing is out of reach. In 2025, several UK lenders specialise in products designed for people with bad credit — offering smaller loans, flexible repayment terms, and eligibility checks that won’t harm your score.

This guide compares the best bad credit loans in the UK, exploring lenders, APRs, features, and alternatives, so you can borrow wisely and rebuild your credit profile.

Estimated read time:

Aug 31, 2025 | Personal Loans

Introduction
What Are Bad Credit Loans?
Who Offers Bad Credit Loans in the UK?
Top Bad Credit Loan Lenders in 2025
Interest Rates and Loan Terms
Eligibility and Approval Factors
Alternatives to Bad Credit Loans
Pros and Cons of Bad Credit Loans
Tips for Improving Approval Chances
FAQs
Conclusion

Introduction: Why Bad Credit Doesn’t Mean No Options

Struggling with a poor credit score can make borrowing feel impossible. Missed payments, defaults, CCJs, or simply a thin credit file all reduce your chances of approval with mainstream banks. But in 2025, there are still many FCA-regulated lenders in the UK that offer bad credit personal loans — designed for borrowers who don’t fit the “perfect” profile.

Of course, the trade-off is usually higher APRs and stricter affordability checks. This guide compares the best bad credit loans in the UK in 2025, breaking down lenders, rates, eligibility, and safer alternatives.

how much can you borrow with a guarantor loan

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What Is a Bad Credit Loan?

A bad credit loan is any form of borrowing available to people with low or limited credit scores. They include:

Unsecured personal loans (smaller amounts, higher APRs)
Guarantor loans (backed by a friend or family member)
Credit union loans (community-based, capped rates)
Secured loans (using your home or car as collateral)

How Bad Credit Loans Work

Application: Online or via high street/credit union.
Assessment: Lender reviews credit history, income, and affordability.
Funding: Same day to 3 working days, depending on lender.
Repayment: Fixed instalments, usually 1–7 years.

Example:

£3,000 bad credit loan at 29.9% APR over 3 years = ~£125/month
Total repayable ~£4,500

Best Bad Credit Loan Lenders UK 2025

Lender	Loan Range	Typical APR	Term	Highlights
Everyday Loans	£1,000–£15,000	~29.9%+	1–5 yrs	In-branch support, tailored bad credit loans
Likely Loans	£500–£5,000	~39.9%	1–5 yrs	Fast online decisions, soft search eligibility
Amigo Loans (Guarantor)	£1,000–£10,000	~49.9%	1–5 yrs	Guarantor needed, higher acceptance rates
Credit Unions	£100–£15,000	~12% typical	Flexible	Community-focused, capped rates, fair terms
Lendable	£1,000–£20,000	Varies (subprime accepted)	1–5 yrs	Quick funding, competitive for mid-tier credit
Admiral Loans	£1,000–£25,000	From ~14%+	1–5 yrs	Accepts applicants with fair/poor credit

Pros and Cons of Bad Credit Loans

Pros

Access to funds when mainstream banks decline
Fixed repayments make budgeting easier
Can help rebuild credit if managed responsibly

Cons

Higher APRs (20%–49%) mean expensive borrowing
Guarantor loans risk relationships if repayments fail
Secured loans risk repossession of home/car
Limited choice compared to good credit borrowers

Eligibility and Approval Tips

Check your credit file first (Experian, Equifax, TransUnion).
Use soft search tools to avoid damaging your score.
Borrow smaller amounts to increase approval chances.
Show stable income and affordability.
Consider a guarantor if your file has recent defaults.

Alternatives to Bad Credit Loans

Credit builder cards (responsible use improves score).
Credit unions (cheaper than payday lenders).
Family/friend borrowing (if safe to do so).
Debt consolidation via DMPs or IVAs if multiple debts.
Salary advance schemes (some employers offer these).

Worked Examples

Example 1 – Small Loan (£1,500)

Likely Loans at 39.9% APR over 2 years = ~£94/month
Total repayable ~£2,256

Example 2 – Medium Loan (£5,000)

Everyday Loans at 29.9% APR over 3 years = ~£214/month
Total repayable ~£7,704

Example 3 – Larger Loan with Guarantor (£8,000)

Amigo Loans at 49.9% APR over 4 years = ~£300/month
Total repayable ~£14,400

FAQs

Q: Can I get a bad credit loan without a guarantor?
Yes — some lenders accept applicants without guarantors, but rates will be higher.

Q: What’s the maximum I can borrow with bad credit?
Typically £5,000–£10,000 unsecured; more with guarantor or secured loans.

Q: Are bad credit loans safe?
Yes, if the lender is FCA-regulated. Avoid unlicensed offshore lenders.

Q: Will a bad credit loan improve my credit score?
If you repay on time, yes — it can gradually rebuild your history.

Conclusion: Borrowing With Bad Credit in 2025

Having a poor credit score doesn’t shut the door on borrowing, but it does narrow your options. The best bad credit loans in the UK are those offered by FCA-regulated lenders, credit unions, or guarantor providers — not payday lenders with sky-high APRs.

The key is to borrow only what you can afford, compare carefully, and treat the loan as part of a wider plan to repair your credit profile. Managed wisely, even a high-interest bad credit loan can be a stepping stone to future financial stability.

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