Loans With Bad Credit
If you’ve had money problems or debt in the past, it might have left you with a poor credit rating, yet you could still be eligible for a loan. Working with our partner Aro and their trusted panel of lenders, with one simple search you can view your loan options in minutes.
Just like Asda Money, Aro is a credit broker, not a lender. If you take out a product through Aro, Asda Money will receive a commission payment from Aro. The amount charged will be in connection with the specific product selected and so different amounts of commission are received. For more information, please see our FAQs.
You'll be taken to Aro’s eligibility checker to view your loan options.
Why choose Asda Personal Loans?
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The Asda advantage
Known for putting value for money at the centre of everything we do
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One simple form…
Receive quotes from a trusted panel of lenders without harming your credit score
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Asda service, Asda value, expert providers
Loan options that work around you
What is bad credit, and do I have it?
Bad credit means that your credit history is impaired. Previous financial problems and past debt can lead to poor credit. These include:
- Late payments on things like credit cards
- Defaulting on payments on credit cards and loans
- County Court Judgements (CCJs)
- Insolvency and debt solutions, like IVAs, DMPs or DROs
- Bankruptcy
- Too many hard searches on your credit history – if you’ve applied for credit multiple times
Sometimes, your credit score may be poor simply because you haven’t demonstrated responsible borrowing. This may be because you’ve never borrowed money, are young or have just moved to the UK. Taking out a credit card and always meeting your monthly payments is a good way to build your credit history and show you can borrow responsibly.
Types of loans for bad credit
Even if you have poor credit, you may still be able to borrow money. Options may include:
Personal loans: Some personal loans are available with bad credit, but remember, you will likely pay higher interest rates and may not be able to borrow the full amount.
Secured loans: With a secured loan, you put up an asset as a guarantee, such as your home. Secured loans offer a way to borrow a fixed amount at a more competitive interest rate when you have poor credit. Just be aware that you can lose your home if you default on payments.
Guarantor loans: With a guarantor loan, the lender will ask a friend or family member to agree to take on the loan repayment if you can’t pay it. Guarantor loans for bad credit may help you access money, but it may put financial pressure on your friend or family member.
Pros and cons of bad credit loans
Pros
- You could borrow money even if you have bad credit and get the financial help you need.
- You’ll get the money quickly. If you’re accepted for credit, the money could be in your bank account almost immediately.
- If you keep up with the loan repayments, this can help you improve your credit score and get it back on track.
Cons
- Loans associated with a poor credit score often come with higher interest rates over the long term. This means you’ll pay more in interest over the term of your loan.
- If you default on any payments, you can damage your credit score further.
- Borrowing money when you have existing debt means you’re increasing your debt even further. This can increase the pressure on your financial situation. If you’re worried you can’t afford the repayments, consider all your options and think carefully about taking out the loan.
How can I improve my credit score?
To improve your credit score, you should:
Pay your bills on time: If you have a credit card, for example, paying your monthly bills in full and on time every month will show that you are a responsible borrower and can be trusted.
Check your credit report for errors: You should regularly check your credit report to see if it is accurate and up to date. Any mistakes can negatively impact your score, so ask for any errors to be removed promptly.
Register for the electoral role: This is simple and easy, and helps boost your credit score by confirming your address for lenders.
Close unused accounts: Leaving unused accounts open can negatively impact your credit score. Close any you aren’t using for a quick boost to your score.
Don’t make too many applications at the same time: Each time you apply for a personal loan, the lender may run a hard search on your credit history. This would then show up on your file. If lenders can see multiple applications in a short space of time, they may be concerned that you are in financial difficulty.
Keep below 50% of your credit limit: It’s best to keep some credit available for unexpected purchases. This shows lenders that you can borrow responsibly.
Poor credit loan alternatives
If you have poor credit, consider the following instead of a loan:
Borrowing from family or friends: Depending on your relationship, you may be able to borrow money from those closest to you. You won’t need a credit check, and they may decide not to charge interest. Consider how borrowing money may impact your relationship, especially if you struggle to meet your monthly repayments. It can be a good idea to draw up a written loan agreement to clarify the amount, terms and repayment schedule.
Credit cards: You may be eligible for a credit card instead of a loan. This is more suited to smaller payments. Taking out a credit card and paying it back on time will also help you boost your credit score.
How Asda Money can help
Help and Support
If you have a poor credit rating and want more information on how to manage your finances better, discover the Financial Support at Asda Money.
Top Personal Loans FAQs:
- Why choose a Personal Loan?
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Asda have partnered with Aro, who are a leading credit broker. This means customers can get access to a carefully selected lender panel who provide personal loans.
- How does it work?
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With one simple check, you can search Aro’s panel of selected lenders to see what loan options you have. Once you’ve been approved you will receive your funds, which in some instances could be on the same day.
- How much can I borrow?
- Will applying affect my credit rating?
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No. One of the best things about our service is you get access to a panel of trusted lenders with no hard credit footprint left on your credit file. When you apply with us, a soft search is completed which doesn’t harm your credit score.
However, if you do proceed with an offer from your search with us, the lender will complete a hard search. This will show on your credit file.
- What credit score do I need for a bank loan?
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Strictly speaking, there is no minimum credit score for you to be approved for a personal loan. If you have a strong credit score, more lenders may be willing to lend to you with better interest rates on offer. If you have a lower credit score and have had problems borrowing in the past, you may find a smaller pool of lenders are willing to lend to you. You may even have to look for a specialist lender that offers loans for bad credit.
- Can I get a loan with a CCJ?
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If you have a county court judgement (CCJ) against your name, you may struggle to get a personal loan with mainstream lenders. However, you may find specialist lenders that are willing to lend to you.
- Can I borrow money with bad credit?
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If you have bad credit or have had money problems in the past, you may find that some lenders aren’t willing to lend to you. Those that are may only do so with higher interest rates. It’s worth looking at specialist lenders for bad credit loans. Or you can work on your credit score to improve it before applying for a loan.
- Why won’t my bank give me a personal loan?
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Lenders look at a variety of factors when deciding on whether or not to offer you a loan. They each have their own criteria which will take in your credit score, job, monthly income and more. If you have been rejected by a lender, you can always ask them why and hope they will give you some insight into their lending criteria. They may direct you to one of the main three credit bureaus to find out more information
- Can I borrow money with a poor credit score?
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If you have a poor credit score or have had money problems in the past, you may find that some lenders aren’t willing to lend to you. Those that are may only do so with higher interest rates. It’s worth looking at specialist lenders for bad credit loans. Or you can work on your credit score to improve it before applying for a loan.
- How to get the lowest rate for a personal loan?
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The interest rates offered by lenders depend on a range of factors including how much you’re borrowing and the length of the loan. They will also look at your credit score. To help get a lower rate, you can look to improve your credit score by signing up to the electoral register, closing old accounts, checking for any errors on your report, and paying all your bills on time. You may also consider increasing the length of the loan or borrowing less.
- Can I take out a loan if I already have one?
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Yes, you can. When you apply for a new personal loan, lenders will look at your existing borrowing to see if you can afford the second loan. Many people choose to take out a new loan to consolidate existing borrowing – whether loans or credit cards – into one loan with a single monthly repayment.
- If I already have bad credit, what could this mean for my application?
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When you apply for a personal loan with a lender, this will show up on your credit file. Your credit score may take a very small hit in the short term once you take the loan out. But if you pay your monthly payments on time and in full, this can have a positive impact on your credit score.
About our trusted provider, Aro
Asda is in partnership with Aro which is a trading name of Aro Finance Limited. Both Asda Money and Aro are credit brokers, not lenders. We offer our customers a different solution to borrowing money and finding a loan.
We work alongside Aro so we can provide our customers with their very best loan offer from a panel of handpicked trusted lenders.
With one simple eligibility check, our panel of lenders can provide you with a loan tailored to your needs. It’s also a safe way to find a loan without negatively affecting your credit rating.
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ASDA Money is a trading name of Asda Financial Services Ltd who are an Introducer Appointed Representative of Aro who are authorised and regulated by the Financial Conduct Authority. Aro acts as a credit broker and not as a lender.
Terms and conditions apply. UK residents aged 18 and over. If you take out a loan, Asda Money and Aro receive a commission payment from the lender. Different amounts of commission are received from different lenders and the amount will be either a fixed amount or a percentage of the amount you borrow and dependent on the lender you select. We will not charge you a fee for our services.