All About Payday Loans

Who Can Apply for Payday Loans?

In short, if you have a job and a bank account, you're likely to have your application approved. All you need to show is that your account will have enough money in it by payday to repay the loan and the associated fees - your financial past isn't considered, and there is usually no credit check applied.

Your bank account will need to have a debit card facility, which will be used to automatically repay the loan on the specified date.

How Much Can You Borrow?

Typically, you can borrow between £100 and £800 although this will vary a little depending on the lender - some will not want to lend small amounts and so may set a minimum of around £300.

Can You Renew Your Loan?

Yes, in most cases you can take out a new loan the next month if you run out of money again, although many lenders will require you to borrow a little less each month so as to gradually wean yourself off the debt.

How Much Does It Cost?

Payday loans are by no means a cheap form of finance, and you can expect to pay around 15%-25% of what you borrow in charges. Over a single loan period of a month, these fees might not seem too much of a price to pay, but if you fall into the trap of taking out a new loan each month then the cumulative cost over a full year is extremely high, leading to APR figures of 2,500% or even more - quite obviously, payday loans are not a good option for long term borrowing.