What Are Bad Credit Loans?

At Sunny we understand that emergencies can affect you financially, and it is for this reason that we aim to provide support for our customers who find themselves worrying about how to make ends meet. We also want to help you make the best financial decisions for you, so when we receive a loan application we take care to carry out a full credit check as part of our review process.

We make sure to only lend to those who will be able to afford to repay their loan on time, and our credit check ensures we avoid lending to those who may find repaying a loan difficult.

If you have bad credit, or have had problems with credit in the past, you may find that you don’t qualify for a personal loan with some providers. There are, however, certain companies, such as Sunny, that offer bad credit loans. To help you decide whether applying is a risk worth taking, we’re looking at the positives and negatives of such an option.

Why would ‘bad credit’ affect me?

Having ’bad credit’ means you have a poor credit score. This can be the result of late or missed repayments on a loan, credit card, mortgage or other credit agreement or having high levels of existing credit in your name.

If you have had a problem like this in the past, it will show up in your credit history, and will indicate to the company you are seeking to borrow from that you may be at higher risk of falling behind with your repayments. This could affect your chances of being approved for a loan, as companies generally do not wish to lend to an applicant who has a less-than-perfect history of managing credit repayments. However, not all hope is lost. At Sunny we want to help people as much as we can, so even if you have had some problems managing credit in the past, you could still qualify for a bad credit loan with us.

Limited credit history

Unfortunately, having a limited credit history can be just as damaging as a bad credit score, as having no credit history, or very little, means the lenders are unable to gain an accurate insight into your financial behaviour. Many lenders who provide bad credit loans will need a certain amount of information to be able to trust that you will repay them. If your credit history is limited, they will be unable to determine whether you will meet the payment deadlines, or even pay back at all.

How to improve my credit score

If you find that bad credit is holding you back there are a few things you can do to improve your situation, and make it more likely that you will be able to successfully apply for a loan in the future. One of these is making sure you close any bank accounts you no longer use and correct any details that are shown incorrectly on your credit report. You can check your credit report with each of the three reference agencies – Experian, Equifax and Callcredit – to make sure everything is accurate and up to date. To help your credit score further, try to make sure you make any payments you owe on existing credit agreements on time each month and stay well below your agreed credit limits across all of your accounts.

You should also do your best to pay your other bills on time to avoid bad credit, as well as avoiding any overdue payment charges that your loan or service provider may ask from you. Unlike other loan companies, at Sunny we have no late penalty fees.

If you have a limited credit history because you haven’t borrowed money in the past, there are some things you can do to help. If you don’t already have a current account in your name, opening and managing an account well (i.e. making sure you have money in your account to pay your bills and avoiding going into an unplanned overdraft) can help. Nowadays some utilities and all mobile phone contracts count towards your credit score, so having well-managed utility accounts in your name could also work in your favour. Setting up direct debits from your current account will help ensure you make your payments on time each month.

Payday loans for bad credit

If you have a bad credit score and are struggling to obtain a payday loan you may find a lender who provides this, such as Sunny. If you have a bad credit score, most lenders will require a higher rate of interest, in order to safeguard the risk we take by lending to you, but no matter how bad the situation may feel we will try our best to help you out.

You can get some bad credit loans that need no guarantor, which can make the process much more streamlined and get funds to you quickly, without too much fuss. This means you don’t have to worry about burdening someone else with your financial woes and your loan will arrive as and when you need it to.

Why bad credit loans are important

Someone struggling with a bad credit score can find it difficult to move on from their past mistakes. A bad credit score can affect many things, from your chances of taking out a mortgage, to buying a car. You may not be able to move forward with important stages in your life, and will be unable to do so until your credit rating is improved.

To apply for bad credit loans in the UK, you must be at least 18 years of age and a resident of the UK, as well as being able to show you have a steady income and access to a bank account. If you meet these criteria, then you should be eligible to apply. You should bear in mind, however, that your credit score will be worsened if you later fall behind on the repayments of any loan you take out.

Loans in general

We like to think of the service we offer as a form of life support for our customers, offering flexibility and peace of mind to those that find themselves with an unexpected emergency cost. Our short-term loans offer support to people, helping ensure they can face their various financial ups and downs over the years.

Our application, administration and late payment fee free loans are ideal, and offer the opportunity to spread the payments in a way that suits your budget. You can choose whether you stick to the monthly payments, or pay early and accrue less interest. With our cash loans in just 15 minutes you can have the funds you need almost instantly, saving you a big headache.

We at Sunny offer loans designed to help you on a short-term basis. They are not, however, recommended as a solution to a long-term financial problem, for which we suggest you seek formal financial advice.