What is a payday loan?
A payday loan is when you apply to borrow a sum of money from a lender and is usually used to cover an urgent financial expense, such as boiler repairs or an unexpected vet’s bill.
As the name suggests, a payday loan is designed to tide you over between paydays and must normally be repaid in full within a month. As well as paying back the money you’ve borrowed, you’ll also need to pay interest.
What’s the best payday loan in the UK?
It’s not possible to answer the question ‘what’s the best payday loan in the UK?’.
When it comes to credit, everyone’s requirements are different, and what works for one person might not necessarily be suitable for another.
When searching for the best payday loan for you, the following considerations could help you find a lender that suits your needs.
- How much money do you need to borrow? You should never apply to borrow more money than you need or can afford to repay.
- What sort of repayment term are you hoping for? You’ll generally need to repay your payday loan within a month. If this isn’t suitable, you might wish to do some research into short-term loans as a payday loan alternative. We’ll look into the differences between payday and short-term loans further down the page.
- Is a payday loan really the best option for you? Have you explored other options, such as short-term or guarantor loans? Have you thought about the possibility of borrowing money from a family member or friend? Is the expense really urgent or could it wait until you’ve saved the money?
- Are you aware of how the loan’s Annual Percentage Rate (APR) will affect your monthly repayments and the overall cost of borrowing? When looking for the best bad credit loan for your financial circumstances, you should pay attention to the APR. The APR reflects the yearly cost of the loan and includes interest and any applicable standard fees. The lower the APR, the less the loan will cost you, although it’s important to remember that additional fees, such as early or late repayment charges, are not included in the APR.
Can I get a payday loan with Growing Power?
Growing Power is a credit broker. None of the lenders we work with offer payday loans. Instead, they offer short-term loans between £100 and £10,000.
If you’re looking for a payday loan alternative, Growing Power could help you search.
What’s the difference between a payday loan and a short-term loan?
The key difference between payday and short-term loans is their repayment terms. We’ve provided further details about each product in the table below.
| Payday Loan | Short-Term Loan |
| Typically required to be repaid within a month. | A range of repayment terms available. With Growing Power, you can search for a short-term loan with a repayment term from 3 to 60 months, depending on the amount of money you apply to borrow. |
| If you’re confident that you can repay the full amount, plus interest, within a month, you might consider a payday loan. | A repayment term longer than one month could help you spread the cost of borrowing and make the repayments more manageable. |
| Not as easy to find nowadays, following stricter borrowing terms set by the Financial Conduct Authority (FCA). | Growing Power work with a panel of over 30 lenders offering short-term loans. |
| Due to their short borrowing window, a payday loan may come with a high interest rate. | The longer the repayment term, the lower your monthly repayments, although you will pay more in interest. A shorter term will have a higher monthly repayment amount, but you will pay less in interest overall. |
How to apply for a payday loan
Before you make an application for a payday loan, you’ll need to make sure that you meet the lender’s eligibility criteria.
Requirements will differ between lenders, but as a general rule, you’ll need to:
- Be over the age of 18;
- Be a UK resident;
- Have a UK bank account and valid debit card; and
- Have a regular source of income paid into your bank account.
While the lenders on the Growing Power panel don’t provide payday loans, they do offer short-term, personal loans. You can search for a payday loan alternative with Growing Power if you meet the above criteria.
What is the best payday loan for bad credit?
If you have a history of poor credit, you might choose a lender that specialises in loans for people with bad credit. Again, it’s important to remember that bad credit loans are not restricted to payday loans. It could be possible for you to get a short-term loan with bad credit.
Several of the lenders on the Growing Power panel are willing to consider applications from people with bad credit.
A bad credit loan – either payday or short-term – could come with a higher rate of interest.
Could I get a payday loan today?
It might be possible for you to get a payday loan today, but you should bear in mind that this might not be your only option when it comes to searching for credit.
Some of the lenders on the Growing Power panel are able to send your short-term loan on the same day as your application is approved.*
Is there a no decline payday loan?
There is no such thing as a ‘no decline’ payday loan. It’s not possible to get a ‘guaranteed’ loan – payday or otherwise - even if you have an excellent credit score.
The FCA requires all responsible lenders to carry out a creditworthiness assessment on anyone who applies for credit. These checks are designed to reveal how likely you are to be able to repay the money you borrow, without leaving you financially vulnerable.
Repaying a loan should never prevent you from being able to cover the cost of your essential outgoings, such as mortgage or rent, bills, and food.
Any company advertising ‘guaranteed loans’ or ‘no refusal loans’ is unlikely to be operating in-line with FCA guidelines and would not offer the same level of protection if something were to go wrong. It’s really important to make sure that the credit broker or lender you apply with appears on the FCA register.
We do understand that being in a position where you need money quick can be extremely stressful, but make sure that you carry out thorough research on any company you share your personal and financial information with. The last thing you need is to find yourself in an even worse financial position further down the line.
If you’re worried about your credit score, you might be concerned that a creditworthiness assessment will hinder your chances of approval. As discussed, it might still be possible for you to get a loan, even with bad credit.
I can’t afford to repay my payday loan; what are my options?
If you’ve taken out a loan that you can no longer afford to repay, you should contact your lender. They will discuss any solutions that may be available to help you through this challenging time.
Get free money advice
You can access free, confidential money and debt management advice through several charities and organisations. These include:
*Payout timescales vary between lenders. The time it takes for the money to appear in your account will depend on your bank’s policies and procedures.