How to Apply for Online Loans for Bad Credit?

Borrowing money with bad credit can be challenging. While several lenders cater to people with a below-average credit score, you may find it tough to qualify for offers with competitive rates. 

Moreover, individual credit checks can further damage your credit score. In such cases, people generally prefer borrowing no credit check loans. But is it even possible for lenders to lend money without a credit check? Let’s read on to find out. We’ll also shed some light on personal loans with no credit check and how to apply for them online. 

What are online loans – no credit check?

No credit loans can be personal or secured loans that lenders claim to lend without a credit check. However, the term ‘no credit check’ is simply a marketing gimmick. Lenders advertise loans in this manner to attract customers with low credit scores, trying to save their scores from the damage caused by a hard enquiry. 

When you apply for no credit check loans, lenders show you proposed offers based on a soft credit check. Once you accept a lender’s offer, they will run a hard credit enquiry on your profile. All FCA-approved lenders are required to run thorough background and credit checks before lending money. 

No credit check lenders do run a hard credit enquiry into your credit report. The only difference is that your credit score does not drive their lending decision. Your credit score is an integral part of the application. But some lenders may brush aside the difference and agree to lend you money at higher interest rates, even if you have a bad credit score. 

Thus, no credit score lenders may agree to lend you money despite a low credit score, but the interest rates can be high. 

Where to borrow private loans for bad credit?

Finding a decent loan offer with a low credit score can be taxing. You may have to pay a higher interest rate on loans with a bad credit score. Banks, building societies, and credit unions may offer loans to you even with a low credit score. Credit unions offer loans at interest rates as low as 3% to members. However, to borrow from one, you need to be a member with some savings with the credit union. 

Here are some financial institutions where you can find private loans for bad credit:

  • High-street banks 
  • Building societies
  • Credit unions
  • Online lenders 
  • Loan broking platforms such as Oyster Loans
  • Dedicated lenders 
  • Secured loan providers 
  • Government grants or scheme

It is essential to understand that all lenders will run a thorough credit check on you before lending you money. Once they process your application, they make the lending decision is at their discretion. 

Can I borrow a personal loan with no credit check?

You can undoubtedly apply for personal loans with no credit checks, but we’ve already debunked the no credit check myth. Even lenders who offer personal loans with no credit checks run hard credit enquiries into your credit profile while processing your loan. So, the lender may not let your credit score affect their lending decision, but they will certainly check your credit history.

Unsecured personal loans have higher rates of interest than most secured loans. But how high these rates get depends on your credit score. So if you apply for a personal loan with a low credit rating, you may not be able to qualify for competitive rates. 

What are the best personal loan companies for bad credit?

Oyster Loans is an FCA approved loan broker in the UK with FCA approved lenders catering to people with low credit scores. Compare multiple loan offers for bad credit to find your ideal personal loan with Oyster Loans. 

How to apply for online personal loans for bad credit?

  • Work out a loan amount: This step sets the foundation of the borrowing process. Carefully evaluate your income, expenses, and affordability to work out how much you need to borrow. Try staying within your borrowing limit – avoid borrowing more than you can afford to repay. 
  • Self-assess your credit score: Checking your credit score beforehand will help you give you an idea of the offers you can expect based on your credit profile. Plus, a prior credit check buys you time to improve your credit score and dispute any incorrect items or unidentified inquiries.  
  • Apply online: Online application forms are usually a quicker and more convenient option. All you need to do is provide accurate details about yourself. You also need to supply appropriate information pertaining to your loan to complete the application – loan amount and tenure. We at Oyster Loans understand how tedious it is to fill lengthy application forms. Our optimal form design allows us to get to know you quickly through apt data points. 
  • Compare loan offers: Once you submit your details, the lender will process your application to provide you with pre-approved offers. After you choose a suitable offer, the lender runs a hard inquiry on your credit profile. Oyster Loans provides a range of personalized offers based on your credit rating and financial circumstances. 
  • Complete your agreement: The next stage after your loan’s approval is completing the contractual formalities. It is imperative to go through your contract and the fine print meticulously. Will your lender impose a charge on early repayment? Will you have to pay an additional fee for missing repayments? Carefully read your agreement for these hidden charges. 
  • Wait for disbursal: Once you sign the loan agreement, the lender will disburse the loan amount into your bank account via wire transfer. It may take a few hours or days for the transaction to complete, depending on your bank account provider. Once you have the funds, you can use them at your discretion, albeit responsibly.  
  • Ensure timely repayments: A personal loan, if used responsibly, can be an opportunity for you to boost your credit score. Each timely repayment will help you jump up the ladder. Having a repayment plan with direct debits set up for each repayment can help you ensure timely repayments. Find a repayment strategy that works for you and stick to it until you pay off the entire loan amount. 


Applying for loans online is a pretty straightforward and convenient process. However, some websites can use clever marketing tactics for advertising their products. No credit check loans are a good example of this gimmick. 

FCA-approved lenders will always run a background and credit history check on you if you apply for a loan. The only difference is that some lenders may accept bad credit borrowers more openly than others. 

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