£1,000 Loans for Bad Credit
Updated: April 16, 2024 Author: Paul Gillooly
Key takeaway: Bad credit lenders cater exclusively to those with an unfavourable credit history, and can provide £1,000 loans. Some offer a maximum £1,000, others offer from £1,000. Due to an unfavourable credit history, rates may be slightly higher on some types of finance like a Credit Union loan or Secured Loan, and significantly higher on other types such as logbook loans that can cost up to 400% APR.
Can I get a £1000 loan with bad credit?
Although £1000 is still considered a small, short-term loan by lenders it probably feels like quite a big sum of money to you. Loans of this amount are usually used for those curveballs life likes to throw your way now and then such as the boiler needing to be replaced in the coldest week of the year or your car breaking down when you’ve got a week of work meetings.
With bad credit going against you with legacy lenders, getting a loan can be tough but it’s not impossible. There are lenders out there with a sole focus on helping those with a low credit score secure affordable loans. You don’t necessarily need a guarantor, however, it can swing things in your favour, particularly if you’re deemed to have very bad credit. Anything to remove some risk from the lender, is beneficial.
What you can expect though is to be hit with higher fees than someone with a good credit score and usually a shorter repayment term. It doesn’t last forever. In the shorter-term, it’s high. Once you prove to be a reliable repayer, keeping up with on-times payments, that’s when you’ll see your credit score improve, making finance more affordable further down the line.
Where to get £1000 loans with bad credit
There are a variety of options when it comes to getting a £1000 loan even if your credit rating is poor. Look for a bad credit direct lender as they will be more likely to take into account other factors beyond your credit score. Banks are unlikely to loan to you if you are credit invisible (which is when you have no credit score) or have a very low credit rating even though they probably know more about your finances they’ll still categorise you as a high-risk borrower, regardless if you’re a high earner.
Discover the Lending Options from Bad Credit Lenders
Personal unsecured loans
A personal unsecured loan can be a good option for those without valuable assets to use as collateral. If you miss a payment, things like your car, jewellery or even your home aren’t on the line. However, because you’re seen as a more high-risk borrower with no collateral you’re likely to find that personal loans have a much higher interest rate than a secured loan. When applying for these, try first through lenders offering a soft search so as not to harm your credit files any further.
Soft searches are like eligibility checkers. The earlier you know that you’re likely to fail, you’ll know to apply elsewhere. It’s also worth remembering that if you repeatedly miss payments and debt collectors get involved, courts can get involved too, and can award a CCJ to your creditor, impacting your credit score more.
Instalment loans
Most loans will require you to pay off the debt in instalments. However, some lenders are a little more flexible with how much you can pay back each month. Instalment loans can help with budgeting as you’re paying the same amount back every month. These are typically repaid over a longer period which can also help with your budgeting. Keep in mind that you will still pay interest though but normally at a lower rate than short-term loans such as payday loans, which are intended to be repaid within the month – from your next salary payment.
Logbook loans
A logbook loan – also known as a V5 loan is secured against your vehicle. The downside is, they’re one of the most expensive forms of secured loan. They’re attractive to people who have bad credit because lenders may not do a hard credit check, however, the APR on this type of loan can be as high as 400%. To put this into perspective, pawnbroker loans – another form of secured loan have an APR of around 150%.
Borrowing £1000 over 12 months with an APR of 300% means you’ll be paying back around £3,221. At 400% this rises to around £4,130. You’ll still be able to use your vehicle as long as you make the repayments on time, however, problems arise if you were to default. While a logbook loan is secured against the vehicle, it belongs to the lender and cannot be resold to repay the loan. The lender can repossess to sell the vehicle to recover the loan amount.
Credit union loan
A credit union can offer small loans of around £1000 but there are a few eligibility criteria you’ll have to meet such as working in a certain industry or belonging to a certain trade union. Credit union loans usually require you to be a member who is saving with them before they’ll consider you as a borrower. However, credit unions don’t just look at your credit score, instead, they look at other personal circumstances to determine whether you’re eligible. They are usually much more flexible than banks and offer more socially responsible ways to borrow money without huge interest fees. In England, Scotland and Wales the cap for credit unions is 3% per month – 42.6% per year APR. In Northern Ireland, the cap is 1% per month – 12.68% APR.
Credit union loans aren’t a quick solution and it can take a few weeks before it’s decided whether you’ll be accepted or not.
Can I get a £1000 loan with immediate approval?
If you’ve found yourself in a situation where you need money fast you might be wondering if it’s possible to be approved immediately despite having bad credit. It’s important to remember there’s no such thing as a guaranteed loan but there are plenty of FCA-regulated lenders who can offer same-day loan agreements.
Many bad credit lenders will carry out a soft search, also known as a quotation search before you apply so you’ll know whether you’re likely to get accepted for a loan or not without it damaging your credit score even further.
When you’re in a pinch, it’s easy to get drawn in by lenders offering easy loans for bad credit but it’s worth checking out the FCA’s Financial Services Register to check that your lender is legitimate before proceeding to borrow.
How much will a £1000 loan cost me?
The total repayment coast is determined by numerous factors such as the type of loan you have, the repayment term and the severity of your credit reports. The more serious the entry, the higher the interest rate lenders quote. The most severe are when previous creditors that haven’t been paid have raised legal action, leading to a CCJ, or even bankruptcy. The more recent the entry, the higher the penalty. That’s when you can expect the loan to cost significantly more than you borrowed.
Illustrative Examples of Costs with Representative APRs
| APR % | 1-month repayment | 3-month repayment | 6-month repayment | 12-month repayment |
| 50% | £1041 | £1084 | £1150 | £1291 |
| 100% | £1083 | £1171 | £1311 | £1619 |
| 150% | £1124 | £1259 | £1480 | £1982 |
| 200% | £1166 | £1350 | £1657 | £2373 |
| 250% | £1208 | £1442 | £1841 | £2787 |
| 300% | £1250 | £1536 | £2032 | £3221 |