£300 Loans For Bad Credit

Updated: July 28, 2024 Author:

Key Takeaways: Several bad credit direct lenders have minimums of £300 or less. A Line of Credit account can provide up to £1,200 with lenders starting new customers on lower amounts, quite possibly a £300 credit limit. Payday lenders provide funding based on affordability rather than credit scores, and pawnbrokers accept valuables worth at least the value of the total amount repayable as security against the loan.

    Can I Get A £300 Loan With A Low Credit Score?

    If your credit score is poor, truly awful, or even non-existent because you’ve got no credit history at all, there are still finance options available for you. A personal loan from a traditional high street lender may very well be out of the window, but bad credit loans are definitely attainable. You’ll find specialists in poor credit lending out there who tailor their services to those excluded from mainstream lenders because of the scores assigned to them by credit scoring companies. 

    These are firms who have dealt with some of the very worst of bad credit and understand the numerable reasons why your credit score might be less than perfect. Perhaps you’ve had financial problems in the past and ended up bankrupt or with CCJs. Maybe you’ve missed payments or paid late on multiple occasions… or only just arrived in the country, in which case, you won’t have had time to build a credit score yet. Without a credit score, you’d be in the credit invisible caategory of borrowers. Getting out of that predicament is easiest done by getting your details onto the Electoral Roll.

    High street lenders are probably going to be reluctant to lend you money because they see you as a greater risk, but fortunately, there are other firms who recognise that a credit history is just that – history – and it’s what you do in the future that counts. They’re prepared to give you the money that you need and the much needed chance to prove that you’re financially responsible, albeit with less attractive terms and conditions than those with a perfect credit score could expect. 

    Getting a £300 Loan When Your Credit Score is Shot!

    A few hundred is not a lot of money to lenders. It becomes a lot if they approve every applicant who applies. A likely problem you’ll encounter in your search for a £300 loan is minimum loan amounts from lenders. Standard personal loans aren’t an option, since they’re usually for larger amounts of £1000 or more. When you’re struggling financially, you don’t want to borrow more money than you really have to, forcing you to search for alternative options.

    Avenues to Explore for Small Sum Loans

    Small Loan Bad Credit Specialist Lenders

    There’s an entire marketplace of lenders that specialise in providing short small loans to people with bad credit. These loans will usually need to be paid back over a 3–12-month period and will usually have a high rate of interest. You could work through a list of bad credit loan direct lenders to see the ones offering that amount. For example, Adage Credit provides first time customers with up to £300, then more if you need it. Quidmarket offers from £300 with interest rates starting at 292% APR. That’s subject to status though and will be based on how risky they view your credit profile. The max you’ll pay is much higher – up to a staggering 1625.5% APR. Expect to pay more for very bad credit loans, which is more likely to be for recent CCJs and other severe negative entries applied recently.

    A quicker and easier approach is to use a bad credit broker who will be able to match you with the right lender to suit your needs, saving you time, effort, and unnecessary credit history checks that could negatively impact your score even further. 

    Secured / Pawnbroker loans

    Pawnshops can be convenient if you have valuables to use as security. Perhaps a piece of jewellery worth £400 (on the used marketplace). They’ll hold that as security until the loan is repaid. Interest is accrued and is typically in the region of 115% APR and upwards. The sooner the loan is repaid, the less the total cost of borrowing. Fail to repay, they sell the item, take their money and give you the remaining profit. This is not something you’d want to happen with an item of sentimental value to you and your family so think carefully before using personal items as security to borrow cash. Be certain you can afford to repay. Most of these stores have a maximum of 6 months to repay the loan plus interest.

    Payday Loans 

    Payday loans have had a lot of bad press in recent years, there’s no denying it. However, there have been some drastically needed changes in the law that have tightened up their regulation, making them now a valid possibility if you only need to borrow a small sum like £300 on a short-term basis. Payday lenders focus on affordability rather than credit score, so if you can demonstrate that you have the means to pay your loan back, even if your credit history is terrible, they’ll extend credit to you. 

    Of course, if you decide to go down the payday loan route, you should make sure to do your research first. There can be some disreputable lenders out there, so you should always check their credentials and read customer testimonials before making a decision. Some lenders offer payday loans with no credit check, or brokers advertise guaranteed loans without any actual guarantees, but these will not be FCA regulated and are, therefore, a risky option, hence, why the FCA maintains a register of authorised lenders.

    The parts to pay attention to in the loan terms are the APR (interest rate), the repayment terms and period to ensure they suit your needs before committing to anything. Remember that failure to make your payments in full and on time will lead to more financial problems and an even worse credit score in the future. 

    Lines Of Credit

    Think of this as a credit solution that’s not dissimilar to an overdraft. A line of credit account allows you to borrow smaller sums of money up to an agreed credit limit whenever you need to. This alternative to a traditional loan is a useful option if you’re likely to need to borrow again in the future, since you apply once and then the line of credit is yours for as long as you need it (as long as you make your repayments on time). 

    Lines of credit accounts are based on affordability (just like the proclaimed easy loans provided by payday lenders) and your means of repayment rather than your credit history, so you can be accepted even if you’ve got a very poor credit score. Plus, repayment terms are tailored to your circumstances, making it easier to manage your financial commitments. 

    You can expect the APR to be high with this type of borrowing, and you should make sure that the lender is FCA authorised and regulated before making an application. Nevertheless, this can be a viable option as credit limits can be up to £1,200. New customers start on a lower credit limit, so this could get the £300 funding you need to cover to cover the cost of something you need urgently. 

    A Credit Card For People With Bad Credit 

    For small amounts like £300, an alternative to a bad credit loan is a credit card for people with a poor credit history. There are several companies that will offer credit cards to those with a low credit score for amounts under £500. The terms and interest rate will not be ideal on these cards, but they’re an option for you to consider if you’d prefer not to take out a loan. The added advantage to these is that making regular repayments can help to improve your credit score opening up more funding options should you need finance again in the future. Credit scores are updated monthly and will improve. It’s a gradual process.