£11,000 Loans for Bad Credit

Updated: April 28, 2024 Author:

Key Takeaways: When you need money urgently but have a low credit score, there’s no need to worry. You certainly aren’t alone. Almost a fifth of the UK’s population has a bad credit rating, while 9% have no credit history at all, so there’s still a large market for poor credit lending. As all of those people are sure to need credit loans at one time or another, lenders have designed products to meet the demand, meaning that when it comes to getting loan approval, bad credit won’t necessarily stand in your way. The key to securing the funds you need is to know where to look for bad credit loans.

Do I Have a Bad Credit Score?

Before looking at your credit loan options, it’s important to understand your credit score, and whether it’s really as bad as you think. 

The UK has three main credit reference agencies, each with its own way of scoring individuals. They all work in the same way, though – by tracking your history of repaying loans and paying bills together with other public information like your electoral roll status and entries recorded on public databases like CCJs and bankruptcies. You’ll get points if you make your payments in full and on time, but points will be taken away if you default on a debt or miss a payment. They turn all that information into your single credit score.

Currently, Experian classifies a low credit score as anything under 720 points, while Equifax’s is under 428 points and TransUnion’s is under 565 points. Anything over those numbers will put you in the “Fair” or “Average” category, which opens you up to more lending opportunities, so it’s important to check before assuming that, because of your history, your score must be low. 

If your assumptions are correct, and you do, indeed, fall into the “Poor” or “Very Poor” category, don’t panic. There are still ways for you to get the money that you need. 

What Kind of Loan Can I Get With Bad Credit?

You have a number of borrowing options, even if your credit score falls into the “Very Poor” category, however, if you need to borrow a large amount like £11,000, that narrows things down a little. 

Options like pawnbroker loans, credit builder credit cards, lines of credit, and payday loans are available for smaller amounts, but when it comes to sums in the thousands, it’s best to look at one of the following lending solutions: 

A Secured Loan

For a large amount like £11,000, a secured loan could be the right option for you. Getting a secured loan, even with poor credit, is easier since the lender has your asset that they can use as collateral. Usually, this will be a property, but if you own a car or other valuable item, the lender may use that instead. Of course, if you don’t make your repayments, you’ll risk repossession.

A Personal Loan

If you don’t own a valuable asset, a secured loan won’t work for you, but there are still specialist lenders who can offer you a personal loan for £11,000. It’s true that it’s more difficult to get your hands on the money you need, but rest assured, there are loan providers out there who specialise in the bad credit lending market. These lenders will put more emphasis on your ability to pay than on your previous financial history when making a decision about whether to lend you money. Be aware, though, that the interest rate will almost certainly be high for this type of lending, and you’ll pay more in the long run. 

A Guarantor Loan

If you have a friend or family member who’ll be prepared to act as your guarantor, a guarantor loan could be a good solution for you. With this type of lending, your guarantor agrees to repay your loan should you default. As long as your guarantor’s credit rating is good, you should find it easier to borrow higher amounts, but the interest rate will still be high. Remember, if you fail to make your payments on time, your family member or friend will face a financial burden, and that could be very damaging to your relationship, so it’s important to think carefully before entering into this kind of arrangement. 

A Credit Union Loan

One borrowing option that many people with bad credit overlook is a credit union loan. Some people are even unaware that credit unions exist, however, they can be a useful solution in some cases when you need to borrow large amounts. To borrow from a credit union, you first need to become a member, and that’s where things can become trickier. You will usually have to meet certain criteria – for example, work in a specific occupation or live in a particular area. Still, it’s worth looking at a credit union directory to see if there are any that you’re eligible for. 

Should I Borrow £11,000?

Even people with an excellent credit score should weigh up whether they really need to borrow money before taking out a loan, and this goes doubly so for anyone with a poor credit history. If you fail to make your repayments on time or default on your loan, your credit score will only drop further making it harder to secure future borrowing. 

However, there are times when borrowing money is unavoidable, for example, if you have to cover the cost of an emergency situation. In those circumstances, there are a few things to keep in mind before you start making loan applications:

  • Plan out your budget. You need to work out the amount you can afford to pay back every month before you start comparing loans. 
  • Work out all the costs. Remember that you won’t just pay back the amount you borrow – you’ll pay interest too. With a low credit score, your interest rate will be high, so make sure you figure that into your calculations. 
  • Check the small print. Before you sign on the dotted line, make sure you read the terms and conditions thoroughly. There may be some hidden fees or charges that could catch you unawares. A frequent one is early repayment fees.
  • Prequalify. It’s a good idea to prequalify for a loan before you make an application since your credit rating won’t be affected and you’ll have a clearer idea of the amount the lender may offer you. This is done with a soft credit check, giving the lender a top-level overview of your credit report.

If you have a bad credit score and need to borrow £11,000, there’s no need to worry. There are options out there to help you as long as you know where to look. But remember, to avoid damaging your credit score even further you must make your payments in full and on time. If you do, you can start to build up your credit rating again, and next time you need to borrow money, you may have more options to choose from at more affordable rates.