- December 22, 2023
- Mark Elwes
Best Loans for Single Mothers with Bad Credit in the UK
Table of Contents
Being a single mom is tough. When money is tight, too, it can feel impossible. Many single moms in the UK have bad credit because of money struggles. This makes getting loans really hard.
This blog will talk about the best loans for UK single moms with bad credit. We found 6 loan choices that are easier to get. These loans work better for single moms in the UK with lower credit scores.
This blog will explain loan options. We’ll share who they work for best. We’ll tell you how to apply and what you need. Reading this can help UK single moms with bad credit pick the right loan. Getting one of these loans can help a mom a lot.
Secured loans use an item you own as collateral. This item gets used as security if you don’t repay. Often, cars or homes serve as collateral. If you default, the lender can take your home, car, etc.
Secured loans often have better rates than unsecured options. You can borrow more money too.
What you need depends on the lender. But secured loans typically require:
- Collateral item to secure the loan
- Proof you have a steady income
- Decent credit score
Be sure you can pay the full loan amount over its term.
Needs regular income to qualify. Read all the rules so you know what could happen if you default. Get an affordable payment fitting your budget.
With guarantor loans, someone signs the loan agreement with you.
First, the lender checks out your guarantor. They want to confirm this person has strong finances and credit. If the guarantor looks good, the lender considers your application next and this is the best loan for single mothers with bad credit if you’ve assistance.
Often family or friends serve as guarantors. But it risks that relationship if you miss payments. Some lenders find guarantors for borrowers for a fee.
You must keep making the payments. If you miss or stop paying, the guarantor must pay instead. This will likely hurt their credit and finances, too. Always pay on time so your guarantor never gets stuck with your loan.
Read all the rules for both you and the guarantor. Get a loan amount you can repay fully during the term. Guarantor loans allow those with bad credit to qualify. But the guarantor shoulders all the risk if you default.
Credit unions are like small banks. Members pool savings to lend to others later. Credit unions offer loans with reasonable fees and rates. Approval depends more on income than credit scores.
Being in its field of membership allows you to join. Some ties are geographic. Others stem from employers, churches or groups. Credit unions want to aid their communities.
Once a member, you can apply for available loan types. Even with bad credit, approval mainly weighs your job stability and income versus the loan size.
Good options for single moms are local credit unions with:
- Used auto loans
- Debt consolidation loans
- Personal loans
Have pay stubs, tax forms or bank statements ready when you apply. Keep loan requests modest based on your budget. Read all policies so rates, fees and risks are clear before borrowing.
The government offers schemes to help folks in need. Programs give loans or grants to qualifying single parents. This funding aims to cover basic needs. It can pay for food, housing costs, transportation and childcare.
Support for Mortgage Interest, Budgeting Loans and the Flexible Support Fund are key schemes. Check eligibility rules to see if your situation fits. Having little income compared to costs is a frequent requirement. Most programs need you to get other benefits already. Apply through Jobcentre Plus offices or your local council.
Good options provide:
- Support for Mortgage Interest – help with housing payments
- Budgeting Loans – funds for vital costs
- Flexible Support Fund – payments for urgent needs
Have your benefit letters, bills, and bank statements ready. Get help filling out applications correctly. Note these are often small or temporary payments. Govt funds aim to aid people while they work toward self-sufficiency.
Payday loans give fast cash before your next paycheck. But they charge very high fees and rates. Borrow only small amounts for true emergencies.
Payday lenders do not check credit much. Approval depends on the following:
- Steady Income
- Checking account
- UK address
Payday loan fees often equal 30% of the loan or more. On a £500 loan for one month, you might pay £125+ in fees! This is why payday loans get very costly over time. Rollover loans or extensions make fees pile up fast.
If you want this loan with manageable terms, then get the loan from ExtramileFinance. Prepare a plan for repaying on your next pay date before applying. Look closely at all rates and fine print. Make other cuts if needed to pay off quickly. Payday loans should only bridge an urgent, temporary money gap.
Peer-to-peer lending connects people needing money with investors. Investors fund personal loans to folks needing cash. Many peer lending sites let those with bad credit borrow.
To apply you give details on income, employment and banking. Investors choose which loan listings to fund. Their investment is repaid over the loan term with interest.
The benefits of payday loans are:
- Lower rates – letting you pay back faster
- Larger loan amounts when approved
- Longer terms – avoiding rollovers
Good peer-to-peer options allow co-signers if your credit is very poor. Or match you with an investor offering a doable rate for your situation. Peer lending opens more ways to get bad credit loans in the UK.
Read all listing policies first. Check you meet investor criteria, too. Payback reliably to uphold your borrower rating on the platform.
There are more options for single moms with lower credit in the UK than you think. Secured loans use collateral you have to get better rates. Guarantor loans have a co-signer ensuring you repay.
The key is finding an affordable payment that fits your budget. Read all rules before borrowing so risks are clear, too. With a steady income, there are paths to get the help you need now while improving your finances over time.
Mark Elwes is the Editor-in-Chief at Extramilefinance. He is a notable member of the content strategy team since his joining in 2017. Driven by his fondness for the finance industry, he has spent years gathering as much knowledge as possible about various financial products that include loans also. Previously, Mark worked as a senior journalist writer with experience in writing blogs and articles.