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Personal loans for bad credit will be analysed here beginning with 12 month loans (24 months will follow). There are 2 types of lenders targeting this niche. You firstly have the various firms that specialise on instalments (payday terms may also be provided). These companies often stop exactly at the 1 year point. Then you have the more long term specialised firms who typically start from 1 year onwards. There is a significant difference between these groups in product value. Most of those leaning on the instalment side charge £900+ for a £1000 loan. Value from personal loan lenders in contrast is much more competitive. The top 5 deals all come in at under £500.

Sizeable subprime lending was championed by 2 brands who won’t be included today. This is since Everyday Loans have a minimum term of 18 months and so we’ll include them at 24m. Then there is Pounds to Pocket who had merged with On Stride, but all such Enova brands ceased trading in late 2019. Everyday has been in business since 2006 and is famed for their branch network. Pounds to Pocket helped to develop this niche online when they advertised aggressively on TV soon after launching in 2010. There are several big names competing for market share, but there is no such dominant force as seen in other sectors be that Amigo (guarantor) or the now closed Wonga (payday).

About: Niche

There are just 22 brand listings on this page, but there are other subprime options over this period noting the guarantor and logbook sectors. Each of those require some form of security though whilst here the reliance and trust is firmly placed on the borrower and their credit worthiness. Most of the providers shown are happy to consider bad credit. There are some that are however seeking fairer credit scores. It will be important to demonstrate affordability, especially for lump sums. The true prime unsecured loan products come from banks and specialist lenders where the APRs float around 20% (even in the single figures when accessing thousands). Low rate deals will be explored in future comparisons.

Using any featured company can be a useful step up from 6 months when you want more time to lower the monthly repayment. You have to be careful though when opting for more sizeable borrowings at say £1000 since this is where the costs really ramp up. As was noted, some instalment lenders can hand you this term, but charge almost as much as interest as the actual money that is there to spend. For a £1k loan we’d only advise using a provider that is charging less than £500 and there are few of these listed below. For the best overall value, it would however always be worth heading down the guarantor route to pay approx £230.

Notes…

Alexa.com: Comparison listings are sorted by global traffic rankings. Those unranked are sorted alphabetically.

Amounts: Borrowing amounts displayed are complete ranges (across every term available).

Closures: In-Sync Credit Services, Juo Loans, NextCredit & Pounds to Pocket. More recent: George Banco, Maxcroft (product removal), MyJar, On Stride Financial, Peachy & Satsuma Loans.

Examples: £1000 costs have been sampled. Any lenders not offering exactly 12 months were excluded regardless of early settlements.

LOCs: Line of credit facilities are not included in this comparison. They aren’t designed for long term borrowing and so we stop comparing them at the 6 month point. For illustration purposes their costs would translate as follows: Drafty (£657), Polar Credit (£618.80), SafetyNet (£2920) & Tappily (£1241).

Pricing: Some featured lenders charge variable interest. When a quoted range is presented we’ll mark this range with (rep) noted besides the representative rate. Others may note a vague variable range, yet only show one such example. For these, we’ve marked (rep) on its own. For reference, when shown the representative APR this is the rate that at least 51% of customers receive.

Best Prime Deal

5) H&T Pawnbrokers: £391.52

Feefo.com (5* Percentage + Exact 5* Counts)

3) Oakam: 94% (18,360+)

Prime: 118 118 Money

The famous directory enquiries provider voyaged into the competitive world of financial services in 2013. 118 offers a competitively priced loan at £176 for £1000 that did beat every other listed company (now 2nd behind Creditspring). Most of 118’s customers however pay their representative rate leading to a charge of £428. This lender has attracted positive support on review portals. They have 14k+ reviews on Trustpilot scoring at 94%. They did rate 96% on Feefo as well, but this account has now been closed. They are also open 7/7 for new applications and 24/7 for existing customers. A sizeable £5000 loan is possible here. Ideally, they’d extend to longer repayment terms (2 years can be selected at max). 118 has also made their credit card available to lower scored applicants. A monthly subscription is however required regardless of a cleared balance.

Subprime: Likely Loans

Oakbrook Finance launched GuarantorUs in summer 2013. This project was moderately successful, but the owners wanted a switch from guarantor lending and so followed a full rebrand to Likely Loans in 2014. Product value is of note here. Likely’s representative rate (that most people pay) is £278. This was beaten by Creditspring (£120), AvantCredit (£205.16) and Bamboo (£235.72). Avant however lacks customer feedback and traffic performance. Bamboo scores better in these departments, but there is always the chance that they’d push on a guarantor (says may be required). Recent entrant Creditspring really looks the part and is only really lacking on flexible amounts and terms. You receive this here with £5000 and 5 years max. It’s just a shame they close across weekends. It’s worth paying attention to both the Creditspring/Likely Feefo ratings. Both are very close now to attaining a 90% 5 star share.

Last Update: June 16th, 2021