At some point in your life, you’ve probably taken out some form of credit, whether it’s a loan, a credit card, or even a mobile phone contract. Even with the best intentions to make your repayments on time, life doesn’t always go to plan and in some cases, it might have meant missing your repayments.

Even if you tried to catch up quickly or you arranged an alternative payment plan with your creditor, negative information stays recorded on your credit file for six years, so even a few years on from a small financial mishap, you could still be facing the consequences of missing your loan repayments.

For some people, where this may have happened more than once over a few years, getting a loan, or taking out credit for a small amount might be near impossible. Most mainstream credit card providers and banks who offer overdrafts only provide low interest rate borrowing options to people with a really good credit history. So, what can you do if you need to borrow a small amount of money which you know you can afford to repay over a few months, but you have a poor credit history?

Instalment Loans - How does an instalment loan work?

An instalment loan is a small amount of money you borrow over a few months and each month you make a repayment towards the loan. Usually, an instalment loan has a loan term of between 3 and 6 months, but some short term lenders may provide loans for up to 12 months. The amount is typically under £1000 and normally you repay a bit of the loan principal with each repayment.

An instalment loan lender will conduct an affordability and creditworthiness assessment to check that you can afford the repayments. Most short term lenders will understand that your credit history might not be brilliant, so usually a low credit score won’t be an immediate deterrent. Although a bad credit history doesn’t mean your application will get rejected, there are some flags like County Court Judgements which may prevent the lender from approving your application. You should check your credit file regularly so that you’re aware of the information being recorded, and in case you see a loan or credit product on there that you’ve forgotten about.

Is an instalment loan the same as a payday loan?

An instalment loan is not the same as a payday loan although they both fall under the umbrella term ‘high cost short term credit’. A payday loan only has one repayment date whereas a monthly instalment loan can have up to 12. An instalment loan will probably be more expensive than a payday loan as interest accrues over a longer period of time, but the advantage is that you don’t have to repay the whole loan and interest in one lump sum. For some people, this means they can manage their cashflow more effectively.

Where can I find an instalment loan? provides an instalment loan service, and we understand that your credit history might not be perfect. Our online application form is quick and simple. We conduct various checks to measure your creditworthiness and we may even ask you to consent to us accessing Open Banking as part of our affordability assessment. This is to make sure that we make a responsible lending decision because while you may need the cash, there’s little point taking out a loan if it will land you in further financial difficulty upon repayment. You will get your loan decision within minutes, and if approved, the funds will be transferred to your account within 2 hours.

Applying for a instalment loan, even if you have bad credit, is a simple process and we want to ensure that you have access to cash quickly when you need it. But we are also a responsible lender, and so we can’t promise to approve every application, even if you’ve borrowed with us before. We assess each application individually and based on the latest information available to us.

Debt Advice

Not all cashflow issues can be solved by borrowing money. If you are concerned about the financial difficulty you are facing, maybe it’s becoming more long-term or your financial commitments are starting to outweigh your income, you might need to speak to a free and impartial debt advice charity. They can help create a budget and in more serious cases, offer advice on debt management solutions which might be suitable in your specific circumstances.