£1,500 Loans for Bad Credit

Updated: April 28, 2024 Author: Paul Gillooly

Key Takeaways: Securing £1,500 loans for bad credit applicants can be done fairly fast. Most payday loan companies provide instalment loans up to 12 months for sums up to £2,500. Interest rates are high. Alternatives are using Credit Union Loans, secured loans, or guarantor loans from specialist lenders focused on bad credit applicants. Those firms can provide fairer finance with more manageable monthly repayments.

Why a £1,500 Loan for Bad Credit is a Challenge

Your credit score is effectively a risk assessment. When a lender sees your bad credit, what they are seeing is that you’re at a high risk of not making timely repayments. This means, for them, chasing you for the debt repayments, or, quite possibly, you filing for insolvency making it difficult for them to recuperate the capital lent plus interest.

It’s for this reason that your applications are likely to be rejected. This is especially true for traditional lenders that want a high level of reassurance. This can make it feel as though you have no options.

What makes it worse is that repeated applications can further damage your credit rating, making the situation even worse. In such times, you may feel desperate but it’s important to think rationally about your options.

Where To Get A £1,500 Loan for Bad Credit

Once you’ve had a loan refused by any lender, pause. Every loan application results in a hard credit check being done against your credit reports. Too many of them in quick succession, lowers your credit score incrementally. The more you apply, the worse your situation becomes. It’s not a foregone conclusion that you will be consistently rejected. You just need a different strategy. One that involves approaching a different type of lender.

Specialist Lenders

Many lenders out there specialise in lending money to those with bad credit. This often comes at the cost of higher interest rates, but it can allow you to get the money you need faster. These lenders will do a credit check but one that isn’t as stringent. You can compare their terms and interest rates before and after applying to see if they are right for you. This gives you a greater chance of success.

Secured or Guarantor Loans

Lenders are more likely to give you money if they can mitigate at least some risk. There are generally two ways to do this. The first is by offering up some secured collateral in the form of your car or home. If you miss payments, then these assets are at risk, but it does give you a higher chance of getting the loan.

The second way is by making someone else responsible with a guarantor loan. With this type of lending, if you fail to make payments, the guarantor becomes liable for the repayments. These both come with risks and can be worth looking into.

What You Need to Consider

Before applying for your £1,500 loan for bad credit, there are a few things that you need to consider before going through with an application.

Interest Rates – Due to the increased risk of missed payments, the interest rates you’re offered are likely to be much higher than someone with good credit would be offered. You need to understand these rates and be confident and comfortable paying them.

Repayment Terms – You need to carefully review the repayment terms. This includes the amount you’re offered, the monthly instalments, and the duration of the loan. You have to ensure they all align with your financial capabilities.

Fees and Penalties – Some lenders are harsher with late payments than others. It’s important to know what charges you’ll face to avoid any unexpected costs. If, for instance, you have entries on your credit report nearing 6 years old, those will drop after six years, improving your credit score. If you were to take out a £1,500 loan over 36 months but may want to refinance when your credit score improves, there can be an early repayment fee payable to the lender. Check the fine print.

Alternatives to a £1,500 Loan for Bad Credit

If you’re looking for a £1,500 loan when you have bad credit, then it’s likely you’re in a tricky situation. Even if you’re not, and have an improved financial outlook, it’s a great idea to look at your other options.

Getting a Lesser Loan – Do you need the full £1,500, or could you settle for something less? The higher the borrowing amount, the bigger the risk to lenders. Due to this, if you apply for a smaller loan, you’re more likely to be accepted. It’s worth applying for the smallest possible loan you need.

Look for Alternatives – What do you need to loan for? For example, if you’re looking for a bad credit loan for a car, could you take public transport? Or if you want a holiday, perhaps you can have a staycation instead. Whatever you need the money for, think of ways that would avoid borrowing.

Speaking to Creditors – If you need the money to pay debts, then it’s best to speak to creditors first. Many will offer you relief in the form of payment breaks, interest freezes, or reduced payments. Speak to them first before getting yourself into further debt.

Debt Solutions – If you are struggling with debt, there are many solutions out there to help, such as debt management, IVA, and bankruptcy. All of these need significant research and specialist advice but can be a way out of crippling debt, such as borrowing £1,500 to repay multiple payday loans accruing astonishing interest charges.

Asking Family or Friends – Admitting to family and friends that you’re in financial strife can be tough, however, they may be able to offer you a lifeline. This can be a better solution than adding to your debt burden and having high-interest rates.

Think With Clarity

When you’re struggling financially, it can be difficult to think clearly. Thankfully, there are lenders out there who specialise in loans for bad credit. It’s a good idea to search for these lenders to increase your chances of getting a loan on the most favourable terms possible.

However, you should also think about whether or not a loan is right for you. Even if you’re accepted, don’t be afraid to walk away if the terms aren’t what you’re looking for or are comfortable with. You need to carefully think through the consequences of getting further credit if a similar situation that happened in the past were to resurface, leading to an inability to repay.