6 Month Loans for Bad Credit
Updated: October 10, 2024 Author: Paul Gillooly
Quick Answer: If you’ve got bad credit and you find yourself with unexpected bills such as car repairs or home maintenance then specialised lenders can help with short-term loans.
A six-month loan will allow you to tackle any emergencies whilst clearing the debt quickly.
Even though payday loans can seem attractive if you’ve got bad credit, a loan with a short repayment term is nearly always the better option.
Can I Get A Loan For Six Months?
Life is full of unexpected emergencies and when one of these crops up you might not always have the funds to deal with it which can add to the stress of the situation.
It’s a common problem and if you find yourself strapped for cash and needing a loan that will give you access to money quickly whilst having the option for affordable monthly repayments then a six-month loan could help out when you’re in a tight spot.
You’re not alone in needing this type of loan which is why many lenders offer short-term loans for bad credit with repayment terms under 12 months.
No one wants to be carrying debt around with them for years if they can avoid it and sometimes a short-term loan is all that’s needed to get you back on track.
If you’ve got a bad credit score then it’s easy to assume that lenders won’t look at you twice even for a short-term loan but it’s estimated that 1 in 5 people (almost 20% of the population) in the U.K. has a bad credit score.
When you look at it like that, then you come to realise that all is not lost!
Can I Get A Loan With A Really Bad Credit Score?
With almost 20% of the U.K. falling into the bad credit score category and 1 in 10 Brits being credit invisible then you can be assured that lenders aren’t ignoring people with a less-than-perfect credit score.
That’s a huge number of people who will still need access to loans.
And where there’s a gap in the market like that, someone will find a way to fill it. That’s where specialised lenders come in.
Whereas traditional lenders like your bank probably won’t lend to you if you have a bad credit score, lenders that specialise in bad credit loans understand that there’s more to a borrower than their financial history.
To be blunt, if you’ve got a bad credit score you’re seen as a risk and banks don’t like to take risks but specialised lenders will also take into account other factors like you’re current employment and income, your ability to pay back a loan in the here and now and what the type of loan you’re taking out.
It’s not all based on your financial history.
Typically, short-term loans don’t ask for a guarantor or collateral but if you have bad credit these options may be put in place as added security for the lender.
Given that it can take 12-18 months to improve a credit score and a six-month loan is usually used for an emergency then using this secured form of lending could be preferable.
So yes, it is harder to get approved for a loan when you have a really bad credit score but it isn’t impossible.
It is worth remembering though that even with a bad credit lender your credit score will have an impact on how much interest you pay.
What Can A 6 Month Loan Be Used For?
6-month loans are usually used for unexpected bills or a sudden change in your circumstances.
Regardless of what you’re using the loan for it’s important to consider whether you can afford to keep up with the monthly repayments especially if there has been a sudden change to your cash flow.
Missed or late repayments can cause your credit score to drop even more.
Here are some of the common reasons why you might need a 6-month loan:
- Home maintenance: A six-month loan can provide a big help when it comes to smaller home maintenance needs such as repairing or replacing a boiler or fixing a leak. With home repairs, it’s always best to tackle any issues early on to prevent them from becoming bigger and more costly problems further down the line. If you don’t have savings that can cover home repair projects then a short-term loan can help and you’ll be able to protect your home and clear the debt in a short space of time.
- Car repairs: Needing to repair or replace your car at short notice can have a huge impact on your finances. Not only can repairs get costly but being without a car can affect your ability to get to and from work to earn money. It’s a bit of a vicious circle. But with a 6-month loan, you should be able to access the funds needed to get your vehicle back on the road quickly without it having too much of an impact on your day-to-day life.
- Medical bills: If you’ve chosen to opt for private healthcare to bypass long NHS waitlists or the procedure you want isn’t offered on the NHS then medical bills can add unnecessary stress that may impact your health or recovery time. If you’ve chosen private healthcare then it’s essential that you can afford to pay for the right treatment or procedures. If your finances allow it then a short-term medical loan will help you get on the road to recovery quicker than waiting for the free option on the NHS.
Is A Short-Term Loan Better Than A Payday Loan?
When it comes to securing a short-term loan many people with bad credit see payday loans as an easy option.
That’s because payday lenders tend to target people with bad credit scores with promises of being easy to apply for and almost instant access to funds.
Payday loans are nearly always expected to be paid back in full by the next pay cycle though, which only gives borrowers a very small amount of time to sort out their finances and nearly no time to budget correctly.
Payday loans can not only trap you in a cycle of debt but they can be a red flag on your record when you’re looking to borrow in the future. In this case, taking out a short-term loan over 6 months is nearly always better than taking out a payday loan.
Although the interest rate on a 6-month loan will be pretty high if you have bad credit it will be nowhere near as high as the APR on a payday loan.
It’s not unheard of for payday loans to have an APR of 1,500% or higher. So for immediate funds with a short repayment term, a 6 month loan will always have a better APR.
Here are some 6-month loan options to consider:
- Short-term loans from specialised bad credit direct lenders
- Secured/pawnbroker loans
- Line of credit
- Credit union loans
- Credit card for those with bad credit
If repaid fully and on time a payday loan shouldn’t have a negative impact on your credit score.
However, some lenders don’t like to see payday loans on your file and multiple payday loans can affect future lending.
A short-term loan shouldn’t be as much of an issue as long as you don’t default on the loan.
Showing that you can manage credit effectively will, in time, boost your credit score, and that opens up further credit options at more favourable rates and better terms.