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Compare payday loans

A Payday loan is a short term loan that is intended to cater to any emergency need for cash that may occur before your salary payment. The loan is typically between £50 and £1000 and the approval process is quick; you can get the money on the same day you apply.

Below is a comparison of direct payday lenders, see lender's website for full details:
Requirements
  • Over 18 and a UK resident
  • Earn over £500 a month
  • Bank account with debit card
Interest charges:
0.8% per day.
e.g. borrow £100 for 28 days, you pay: £122.40.
Representative APR: 1297%
Borrow from £100 to £1,000 for a period of up to 28 days.   Apply Now
Requirements
  • Over 18 and a UK resident
  • Own a mobile phone
  • Bank account with direct debit
Interest charges:
0.8% per day.
e.g. borrow £100 for 30 days, you pay: £124.
Representative APR: 1509%
Borrow from £50 to £400 for a period of up to 30 days.   Apply Now
Requirements
  • Over 18 and a UK resident
  • Employed with a regular income
  • Bank account with debit card
Interest charges:
0.8% per day.
e.g. borrow £100 for 28 days, you pay £122.4.
Representative APR: 1309.2%
Borrow from £80 to £200 for a period of up to 28 days.   Apply Now
Requirements
  • Over 18 and a UK resident
  • Must be in employment
  • Bank account with a valid debit card
Interest charges:
0.8% per day.
e.g. borrow £100 for 38 days, you pay: £132.4.
Representative APR: 1614%
Borrow from £100 to £400 for a period of up to 38 days.   Apply Now
Requirements
  • Over 18 and a UK resident
  • Have a source of income
  • Bank account with a valid debit card
Interest charges:
£100 - £950 = 0.8% per day.
£1000 - £1400 = 0.68% per day.
£1500 - £1900 = 0.54% per day.
Borrow from £100 to £2500 for a period of 6 to 14 months.   Apply Now

How they work

You provide the necessary details online or on your mobile phone and if you qualify, the money will be deposited directly into your bank account, if there is missing information the lender might contact you for clarification.
You are expected to repay the loan in full when you receive your next salary; usually this means within 31 days, although some lenders will allow you to repay over a longer period of time.

Advantages

Bad credit payday loans
For the lender the most important thing is your ability to pay back the money on your next payday, as long as you have a job with enough income to enable you to pay off the loan at the required time, your credit rating doesn’t have to be perfect.

Fast approval
Unlike traditional loans where you apply and wait sometimes for months, with a payday loan you can apply and have the money on the same day.

Convenience
Whatever your emergency, these services will provide you with the needed cash until payday comes.

Unsecured
You don’t need to be a homeowner or put up any other collateral in order to get a payday loan, therefore they pose no immediate risk to your property.

Many choices
There are many lenders to choose from and most are easy to find, this means you don't have to deal with loan brokers; our comparison consists of direct payday lenders only, no brokers.

Disadvantages and risks

Short time to pay back
Although they are convenient when you need the money, a major drawback is the fact that you have to pay the money back in one instalment, usually 30 days after you took out the loan. This can be a problem if your salary is not enough to cover the loan as well as all your other expenses.

High interest
Most lenders charge around £25 for every £100 borrowed, this is a much higher Annual Percentage Rate (APR) if compared to normal loans. However, considering the fact that payday loans are short term, the cost of borrowing is not that different from normal loans.

Taking more than you can afford
With payday loans, one of the most important things to remember is that you're required to repay all the money you borrowed in one go. With this in mind, you should calculate based on 1 month's income, whether you can afford all your normal expenses and still have enough money left to pay off the loan.

If you borrow more than what you can spare at the end of the month, you risk having to defer the loan; this is even costlier because for each added month the lender will charge you interest.

If you have to defer more than once or have multiple payday loans, things are starting to get out of hand. It might be better to consolidate those payday loans with a long term loan; this will allow you to pay smaller, more manageable repayments, which also will cost you less in interest.

You can also negotiate with the payday lender if you're having trouble paying off the loan; you might be able to work out a longer term repayment plan.

Alternatives

Friends and family
Have you considered borrowing from your friends or family members? If one of them can lend you the money you need, that would be better than a payday loan; your friend is unlikely to charge you interest, they also understand your needs better than a financial institution can.

Bank overdraft
An overdraft is the amount of money your bank will allow you to spend on top of what you have in your account, most UK current accounts have an overdraft facility. If you don't have an overdraft, it is likely because of your circumstances at the time you opened your account, if those circumstances have changed and you now have a good regular income, it is worth applying for one now; ask at your bank branch about overdrafts. An overdraft is better option because any interest you get charged is likely to be lower than the interest on a payday loan.

Unsecured loans
Payday loans have their advantages but constraints such as required payoff within a month and the low borrowing limit might not work for some people. If that is the case then an unsecured loan could be a suitable alternative; limits are higher, interest rates are lower and repayments are spread over years. Even if you have bad credit it's possible to get a loan thanks to the many bad credit lenders. For more on see here.

Pawnbroker loans
Pawnbroker loans are secured against items you own; this can be jewellery or electrical devices: You deposit your items in order to get the loan, once you repay the money you get your items back.
The advantage is that you might get better interest rates since the loan is secured against something unlike a payday cash loan.

Pawnbrokers primarily operate on the high street and can be found in town centres across the UK.

If you have trouble managing your debt or need any advice on money matters, visit the Money Advice Service.