Hi Bronny,
It sounds to me as if you will almost certainly have the grades to be accepted - although funding is an entirely diffrent matter. Even if you had a first at UG and a distinction at MA, you'd still struggle for that - literature is a very competitive field, and funding for humanities very scarce. However, I think, if you write the right proposal, and have a dynamism about what you are doing, that can sometimes win out over firsts/distinctions, providing you have good 2:1 and merit grades.
Is there any way you could look at self funding? It'd be a safety net option.
Good luck