Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.
Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.
Theoretically yes – it’s not illegal. You do however have to disclose that you are bankrupt if you apply for credit of more than £500. Below this amount, lenders may still ask during the application process, and you must answer truthfully. Lenders can also see if you have a bankruptcy on your credit report.
You’ll be extremely limited in terms of the lenders you can choose from, and the interest rates are likely to be close to – or right on – the legal maximum for high-cost short term credit (0.8% per day).
If at all possible, wait until your bankruptcy is over before applying – high-cost short term credit is extremely expensive. Applying for a loan when you’re in any challenging financial situation isn’t a decision that should be taken lightly, and this is especially true when you’re bankrupt. Consider why you’re taking out the loan and if there’s any other way you can pay for what you need, or if you can defer the expenditure.
Bankruptcy stays on your credit report for six years. Having a bankruptcy on your credit report may look bad to most traditional lenders, but lenders offering short term loans tend to be more lenient in their eligibility criteria, often focusing on an applicant’s ability to repay.
As your assets and income may have been affected by bankruptcy, deciding whether or not you can afford the repayments is an important consideration. What will your repayments be, and how will they work with your budget?
While it’s possible to get a loan if you’ve declared bankruptcy, it’s important that you don’t take out a loan you can’t afford, as this will likely cause you more financial difficulty.”
If you’re in need of financing and have a bankruptcy listed on your credit report, these are some of the credit options that may be available to you:
While there are lenders who will consider applicants who are in bankruptcy or who have previously been bankrupt, meeting the minimum eligibility criteria and filling out the application isn’t all it takes to be approved. Here are some of the factors lenders will consider when reviewing your application:
If you do decide to get a loan, pay it off on time! This will help rebuild your credit after bankruptcy, which in turn can mean you’ll have access to better rates down the road.
You may wish to consider using a payday loan matching service. These generally use a soft credit search and a panel of lenders that they refer applicants to, so you’ll only have complete a single application form rather than having to go through the process several times with several different lenders.
Bankruptcy will harm your credit score, but it’s not necessarily the end of the road for your ability to be approved for a loan. Realistically, you’re likely to be charged interest at a significantly higher rate for the six years the bankruptcy affects your credit rating, and while you rebuild your credit score, however some specialist lenders will consider your application for credit.
Before you apply, check the eligibility criteria, and use a soft-search/eligibility-checker if the lender offers this facility (if it doesn’t perhaps call to discuss your situation). Above all, only apply for credit if you’re certain you can afford it.
Be sure to visit the lender’s website or call their customer service line to confirm the eligibility criteria before applying to make sure they accept applicants with bankruptcy on their credit reports.
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