- Borrow up to £20001
- Trusted lenders only
- Payouts within 24 hours
- Responsible lending policy
- Alternatives available
At the start of 2015 limits were imposed on the cost of payday loans (see box). This has caused a shake up amongst lenders - many left the market while the more innovative and lower cost ones remained. Even now there is interest rate cost competition.
For instance if you were to borrow £200 for 28 days the maximum you should have to repay is £244.80 [£200 + (0.8% x 28 days x £200)]. However we know of lenders who will charge in the region of £229 to £232. Quite a saving.
There are upper limits on payday loan charges:
There are also restrictions on loans being rolled over (which would otherwise add to the loan's cost).
Prior to 2015 payday loans were often criticised for being ridiculously expensive - and there were certainly horror stories about relatively small value loans spiralling out of control and becoming an enormous debt. The limits imposed by the FCA have stamped this out.
Nowadays payday loans are one of the cheaper forms of short term debt. In fact unauthorised bank overdrafts often cost much more than the cheapest payday loans. Another form of short term loan, the doorstep loan, charges approximately the same daily interest as the cheapest payday loan - but a doorstep loan could be something else to consider if you prefer a face-to-face arrangement. They also have the advantage that you can repay the loan over slightly longer period.
1 Subject to application being approved by the lender. Not all lenders are able to provide up to £1000.
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