Applying for a loan with poor credit

If you find yourself in a difficult financial situation, a personal loan can be all you need to get back on your feet. Discover how Scotcash can help.

If you find yourself in a difficult financial situation, a personal loan can be all you need to get back on your feet. However, if you have bad credit or no credit at all, you may be confused as to whether you even qualify for online lending services.

Simply put, getting a loan with bad credit from traditional lenders can be more challenging. With fewer offers and extremely high-interest rates, those with poor credit will have to shop around a little more to find the right financial fit. Just remember that you have options and never to accept a loan that you are not confident you can repay as this can lead to more financial difficulty in the long term.

At Scotcash we believe that no one should ever be excluded from financial help. Our decisions will always be made based on your current affordability, and we will work with you to find the appropriate Scotcash products for your situation. Our affordable and accessible approach to finance puts our customers first, so you know that you are in safe hands with a Scotcash loan.

What is bad credit?

The term bad credit is used to describe the situation of someone with a history of poor financial management. This could be due to late payments on bills or a failure to keep up with credit payment obligations like that of a loan or credit card.

This history may be viewed unfavourably by companies when the individual is applying for loans, credit or financial contracts. This is because poor credit history is often an indication to loan providers that the person is more likely to default on their loan payments in the future, therefore creating a loss for the lender.

In a credit score range of 300 to 850, a score lower than 670 would be considered a ‘bad credit score’ by lenders. Some reasons that your credit score may have dropped include; bankruptcy, too many ‘hard credit’ searches and defaults on payments.
Alternatively, you may have a low credit profile because you haven’t yet built up a credit history. This could be because you are too young, have recently moved to a new country or have never had a credit card or bank account

What is a bad credit loan?

If you find yourself with a bad credit rating it can negatively affect your ability to get a loan approved. Loans for bad credit are available to those who do not meet certain lenders requirements or who have failed other applications for credit.

While some lenders will limit their risk of loss by only working with good credit borrowers, others specialise in providing bad credit loans as a good business opportunity. The latter offset the risk by charging a higher orientation fee and interest rate, resulting in an increased APR.

How can I get a loan with bad credit?

Start by deciding what you can reasonably afford to repay each month. Defaulting on a short term loan for bad credit will only lead to more financial difficulty, so take the time to compare different companies to find one that’s suited to you.

Every bad credit loan that you apply for will record a hard search on your credit report that can lower your score, so only apply for those for which you are eligible. If you are not accepted for a loan this can cause even more damage to your credit.

To apply, lenders will require a current UK address, an email and contact number, your annual income and general outgoings. They will then run a credit check, all lenders that are regulated and authorised by the Financial Conduct Authority (FCA) must do so by law as part of your loan application.

Loans with no credit check are not approved or protected by the FCA.
Each loan application is assessed on its own merits so there is no guarantee that it will be approved.

What to consider when taking out a loan with bad credit

There are a few things you should carefully consider before committing to a bad credit loan.

Most importantly you should ask yourself whether you can afford to pay it back in full and on time. Not meeting your repayment schedule will cause further financial difficulty and further lower your credit score. Only ever borrow within your means to avoid falling into a debt cycle.

At Scotcash we only ever offer what we know you can afford, helping you to make the most of your money.

You should also consider what other options are available to you. Bad credit will limit your choices but there are alternatives to bad credit loans such as secured loans, guarantor loans or choosing to borrow from an affordable, ethical lender like Scotcash.

If your expense is not immediate and you do not require an emergency loan, it would be worthwhile looking into how you could improve your credit score before applying. Even a small change to your credit can positively affect the interest rate and repayment options you will be offered.

Some steps you can take to start to improve your credit score today include: registering on the electoral roll to prove your current address, making bill payments on time and paying off credit card balances.

Advantages and disadvantages of a bad credit loan


  • Provides quick access to money if a sudden expense pops up and you cannot borrow from traditional lenders.
  • When paid off in full on time it can be a good way to improve your credit score. This is an advantage if you hope to apply for more credit with better interest rates in the future.
  • A quick and easy application process


  • Missing monthly payments can damage your credit score further and lead to serious money problems, with consequences involving forced repayment plans or even legal action.
  • High interest rates mean that the overall amount you pay back may be higher than it would be with other lenders.
  • Limits to what you can borrow. As bad credit loans are a risk to the lender, the amount you can borrow will be lower than it would be with other loans. With the higher interest rates, borrowing large sums of money isn’t recommended.
  • There may be extra fees. Always check the terms and conditions for late repayment fees, orientation fees or returned payment fees.

Do Scotcash offer bad credit loans?

Scotcash offers loans to applicants all across the credit spectrum. We understand that not everyone will have ideal credit and that doesn't mean they are not financially responsible enough to take on a personal loan.

At Scotcash we assess all applications on an individual basis and offer affordable loans or financial services that best fit their situation. Our loans serve as an ethical alternative to bad credit loans, in that all of our loans are means-tested and we only lend what we think you can afford.

To apply for a Scotcash loan we have basic requirements that you need to meet. To be considered you need to be 18 years of age or older, hold a UK bank account (we can help you open one if you don’t), be currently living in the UK and have lived here for over 3 years. Lastly, if you have been bankrupt or signed a Trust Deed,entered an IVA or DAS, you also need to have been clear of these for at least three years.

If you meet these requirements your application will be treated the same as any other. If you are rejected or decide a Scotcash loan is not right for you, we can still help you get back on your feet. At Scotcash we are more than just another loans company we offer a unique range of financial services to help you make the most of your money.

Apply for a Scotcash loan today

Applying for a Scotcash loan is simple, you can use our easy online application form, contact us here or pop by your local branch in Glasgow.

We aim to help as many people as possible with our affordable loan scheme. Once we have received your application we will assess it by looking at your income and expenditure and any existing debts you may have. If you are approved, together we will decide on a repayment plan that works for you.

Do you need help?

At Scotcash we provide personal loans starting from just £100. We provide a cost effective alternative for loans where a bank or building society cannot help.