A payday loan is a small, short term advance to bridge the gap until you are next paid. If you have bad credit, some lenders may still consider you based on affordability.
These loans can be expensive, so it is worth comparing options. One soft search shows what a panel of FCA authorised lenders and brokers could offer, with no impact on your credit score.
Costs and the FCA caps
High cost short term credit is capped by the FCA. Interest and fees cannot exceed 0.8% per day, default fees are capped at £15, and you never repay more in interest and fees than you borrowed.
- Interest capped at 0.8% per day
- Default fees capped at £15
- Total cost capped at 100% of the amount borrowed
Is it right for you?
A short term loan can help in a genuine emergency, but a longer instalment loan is often cheaper to repay. Check the total cost and consider whether a lower cost option would suit you better.
Lower cost alternatives
A payday loan is rarely the cheapest option. Where you have a little time, one of these may cost you less.
- A longer instalment loan, which usually costs less to repay
- A credit union, which often lends to people with thin credit
- An arranged overdraft for a short shortfall
Improving your chances of acceptance
Lenders that consider bad credit focus on whether the repayments are affordable now. Applying for a sensible amount, giving accurate details, and using a soft search first all help, and the soft search has no impact on your credit score. A hard credit search is only carried out when you formally apply to a lender which can affect your credit score.
How to apply
Borrowing responsibly
Before you apply, check the repayments sit comfortably alongside your other commitments. Look at the total amount repayable over the whole term, not just the monthly figure, and only borrow what you genuinely need.
Every lender on our panel is authorised by the Financial Conduct Authority, and high cost short term credit is subject to an FCA total cost cap, meaning you cannot repay more in interest and fees than the amount borrowed. If money is tight, free and impartial help is available from MoneyHelper.
Representative Example: £1,000 borrowed for 18 months. 17 monthly repayments at £87.22, final repayment of £87.70. Total amount repayable £1,570.44. Interest total £570.44. Annual interest rate 59.97% (fixed). Representative APR 79.5% (Variable). Any representative monthly repayment shown is for illustration only, based on our representative APR. Your actual repayments will be confirmed by the matching lender if your application is approved.