Some different loans available for bad credit

A look at the different loans available for bad credit and the different names they have:


Doorstep loan

A personal loan which is delivered by a local agent, literally to your doorstep. Loan repayments are also collected from your doorstep by the lender. These loans are targeted at people who may struggle to qualify for a bank loan or have been refused by the high street lenders in the past.


Debt consolidation

Debt consolidation entails taking out one loan to pay off a number of other debts. This is done to secure a lower or fixed interest rate or for the convenience of servicing only one loan. Debt consolidation can simply be converting a number of unsecured loans into another single unsecured loan, but usually it involves a secured loan against an asset that serves as collateral, most commonly a house or car. Having collateral for a loan generally results in a lower interest rate as this reduces the risk to the lender. This process is also referred to as loan consolidation.


Credit rating

A credit rating, also known as credit score, assesses the credit worthiness of an individual and is calculated from their financial history and current assets and liabilities. Typically, a credit rating tells a lender or investor the probability of the subject being able to pay back a loan. A poor credit rating indicates a high risk of defaulting on a loan, and thus leads to high interest rates being charged or the refusal of a loan by creditors.


Cash advance

An instant cash loan historically provided against a line of credit such as a credit card. Today, a cash advance can be accessed on the internet if a person is in need of a short term cash loan, typically to be repaid on payday.

Bridging loan

A bridging loan is a short term loan traditionally used when purchasing commercial property. For more information about bridging loans, please visit their bridging loan page or Bridging Loan Guide.


The Annual Percentage Rate is the interest payable on a credit arrangement calculated over a 12 month (annual) period. Whilst the APR is intended to help you compare the true cost of borrowing, it is not relevant when comparing a short term (30 day) loan to a larger long-term loan, such as a mortgage. The APR assumes that you will hold the loan for at least 12 months or more, and does not help when figuring the interest rate on a 30-day loan.

Loan Agreement

A very thorough document outlining the details of a loan, including the terms and repayment date, given to a prospective borrower before any funds are released.  A borrower must accept the terms of the loan agreement before a lender will release any funds.

Payday loan

A payday loan (also called a pay cheque advance or payday advance) is a small, short-term loan that is intended to cover a borrower’s expenses until his or her next payday.  The amount borrowed must be less than the wages.

Penalty charges

Fees that are charged for breaking your banking and borrowing agreements.  Penalty charges can be incurred for unauthorised overdrafts and unpaid items such as cheques, direct debits or standing orders.

Personal loan

Loans available from banks and other financial institutions to private individuals for their personal use. Such loans are often used to purchase a motor vehicle, holiday or similar item.  Repayment periods vary from one to five years.


As you can see loans come under many different names