What are the alternatives if I have a bad credit record?
Many people take short term loans because they struggle to get credit elsewhere or they have bad credit. If you need to take out a loan you should consider the alternatives.
Credit union loans
Credit unions are non-profit community-based organisations that can offer loans, savings and accounts for their members’ benefit. A credit union can be a way to take out credit if you’ve been declined by a bank. Like short term loans, most credit unions lend small loans of around £50 to £3,000, but usually at a much lower rate of interest
You can apply for a budgeting loan if need to borrow money to pay for essentials like clothes, furniture or rent. You’ll usually have two years to repay it and the money is paid into the same account as your benefits. Budgeting loans are interest free and you can borrow £100 to £1,500, depending on your situation.
To get a Budgeting Loan you must have been getting one or more of these benefits for the past 6 months:
- Income Support
- income-based Jobseeker’s Allowance
- income-related Employment and Support Allowance
- Pension Credit
If you're on Universal Credit you'll need to apply for a Budgeting Advance instead.