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Where To Go If The Banks Are Unwilling To Give You A Loan


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Got bad credit and need a loan? The good news is, you don't need to borrow from a big bank.

The latest figures for UK savings bear this out and make very interesting reading. Especially if you need a bad credit loan.

For quite some time now consumers have been using British banks to do a lot of their saving. It has been a rule of thumb in the industry that over £2.5 billion is banked every month into savings accounts in the big banks. But in October last year, for example, this figure was halved: just £1.4 billion went into those “squirrel accounts" in the high street banks. Where did the rest of it go? The building societies claim that much of the difference has gone to them.

More and more UK savings go to non-bank institutions

These figures above suggest the building societies may be right. And that makes it easier for you to get that loan you need - even if you have a history of loan repayment problems. The big banks might turn you down, but the smaller, more informal, institutions are able to assess you as an individual and could be more likely to lend.

Let's face it, most of us have defaulted on a loan at some time. This is not to say we have permanently defaulted. What I'm saying is we remember times when we've been a few days late with our mortgage or credit card repayment. Our finances do not always flow in smoothly, and there will always be unexpected expenses like illness or the chance to grab a cheaper airline ticket by booking months ahead with our credit card even though we will need a little time to catch up on the repayment.

These minor difficulties are recorded. They blemish our repayment record. And some of the big banks will balk at making a new loan to us because of our bad credit history.

This is where a bad credit loan from another kind of lender comes in.

You can find lenders

A bad credit loan is a loan to someone with a less than perfect credit history. To someone with a bad credit rating. And they are being given every day, all over the UK, both in the big banks and also in the building societies and other, smaller, less prominent, institutions.

Many of them are secured loans. They have been given to a homeowner because he or she has put up the home as a security against the loan. This gives lenders security, because it reduces the risk for them. In the unlikely event of a total default on the loan, the lender who has the borrower's home as a security, can get his money back.

Rates of interest

Even with the security of a home, mind you, the lender still faces slightly more risk lending to someone with a history of bad credit. So he will attach higher interest to a bad credit loan than he would to a conventional one.

But as long as the borrower is able to meet the repayment schedule, this will not be a problem. And it is certainly an easy way to get the money for that sudden, unexpected, urgent need. Bad credit loans are therefor good for both the borrower and the lender.

Jerry Warner writes general finance and loan articles for the Bad Credit Loans Online website at


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