If you have bad credit, finding financial services can be a challenge. Conventional lenders such as banks and credit unions often require you to have good credit to borrow money, so what are your options for bad credit loans? Conventional lenders rarely offer quick loans, so it may be more than a week before you receive your cash.

Luckily, you still have options even if you have a bad credit score. Commonly referred to as ‘bad credit loans’, these unconventional loans can be invaluable in a financial crunch. Bad-credit loans are often very expensive and should not be used as an ideal solution for overcoming financial difficulties. These loans, however, can remedy financial emergencies. Read on to compare and contrast different bad-credit loan options and determine if any are a good fit for you.


Short Term Loans

Short term loans are the most common and widely known bad-credit loan. Sometimes short term loans are referred to as instalment loans or segment loans. It is easy to apply for these loans, and many lenders can get you the cash within a 24 hour period. You can choose the duration of your repayment schedule, which can last between 2 and 12 months after you take out the loan – depending on the lender. Many lenders across industries will allow you to pay your loan back early if you have the money to do so. This is a may be a great option because it will allow you to pay less in interest overall.

Since the short term loan industry is highly regulated, you can feel confident you are not getting scammed if your short term lender is FCA approved. Direct Online Lenders such as Moneyboat offer competitive short term loans to customers within the UK.


Payday Loans

The term ‘payday loan’ is often used synonymously with ‘short term loan’. However, payday loans are meant to be for a shorter term than short term loans. Payday loans are meant to be paid back between one and two months after they are borrowed, as opposed up to the year to pay back a short term loan. Although your payments will likely be higher, you will probably pay less overall than if you took out a 12 month short term loan because your interest is accumulating over a shorter period of time.


Doorstep Loans

Unlike the online payments of short term and payday loans, doorstep lenders come directly to your home to make transactions. Doorstep lenders need official written permission to visit your home legally. This face-to-face contact can be beneficial to customers, who appreciate the opportunity to discuss their finances with someone in person. Others, however, might find this intimacy daunting. Doorstep lenders are very diligent about collecting money. They will make either weekly or fortnightly house calls to collect your loan payments. This can be intimidating if you are late to make your payment, or it can motivate you to pay your bills on time.

While short term and payday lenders can often process payments within a couple of hours, doorstep lenders often can get you your funds within a couple of days or a week.

Not all doorstep lenders are the same! Check out this tool to make sure you are choosing the best option for your area and budget.


Loan Sharks

We are not going to be subtle here — DO NOT BORROW MONEY FROM A LOAN SHARK! Loan sharks are illegal lenders, and they often target low income populations and groups that are vulnerable, such as immigrants. Loan sharks characteristically resort to violence or intimidation in order to get their money.

How can you identify a loan shark? Loan sharks will not have very much paperwork for you to fill out. They often will refuse to give your information, such as how much money you owe, what your APR is and when your payments are due. Loan sharks will not appear on the FCA register because they are not legitimate lenders.


If you ever feel threatened by your lender or suspect he might be a working fraudulently, report the situation to your local authorities:

Illegal Money Lending Team
Report a loan shark online
Telephone: 0300 555 2222
24-hour service
Text a report to 07860 022 116
Find out about call charges

Wales Illegal Money Lending Unit
Telephone: 0300 123 3311
24-hour service
Text a report to 07772 608 931
Find out about call charges

Trading Standards Scotland
Report a loan shark online
Telephone: 0800 074 0878
24-hour service
Find out about call charges

Northern Ireland
Trading Standards Consumerline
Telephone: 0300 123 6262
Find out about call charges

If you have bad credit, it may be difficult to borrow money from banks, credit unions or building societies.