Loans for Bad Credit

If you’re strapped for cash and think you can’t get a loan because you have bad credit, think again. Bad credit is not the same as a bad debt problem, and there are lenders who can assist, even if your credit isn’t squeaky clean.

Payday loans are commonly thought to be loans for bad credit. Being small and short term, they are often used to help cash-strapped people reach their next pay day. The size, length and cost of the loan are often fairly rigid, but funds can be accessed rapidly and the approval criteria are usually simple, which makes them appealing to people looking for loans for bad credit.

What if I have bad credit?

When looking for an online loan provider, it could be valuable to look for one who does a credit check. If other sources of credit are limited, this could be the only way to improve your credit rating. Lenders who run credit checks also feed data back to the credit bureaus, which means a good payment history with even short-term lenders can help improve your credit score.

But not all online lenders are created equal. Many payday loan providers don’t run a credit check because they aren’t concerned with your creditworthiness. They’re banking on, quite literally, borrowers being unable to repay their loan so they’ll have the opportunity to rollover the loan and add extra interest and charges.

How is Wonga different?

Unlike payday lenders, whose only aim is to establish your identity and source of income, Wonga carries out a sophisticated credit check in a matter of milliseconds. The company uses data from the credit bureaus as part of its automated decisions, but the system is completely objective and only aims to check you can afford a fast Wonga loan. Unlike a bank loan, Wonga doesn’t try to predict your reliability over several years. Plus, Wonga will report your good use back to the credit bureau.

So bad credit could influence whether you can access a Wonga loan, but it certainly doesn’t rule you out and - with flexible, short term loans of up to £1,000 available - the cost can be considerably lower than payday loans for bad credit.