Compare with payday loan lenders

Representative Example

Total amount of credit £80, duration of the agreement 29 days, rate of interest 292% per annum (fixed), total amount payable (in one repayment) £98.56. Representative 1281.8% APR.

At we feel it is imperative that you, the consumer, is as well informed as can be when evaluating the most appropriate solution for your financial needs. This is particularly important when assessing the best deal for a payday loan based on the wealth of options available on the market. Here we aim to shed some light on what to look for when making these comparisons.

man holding piggy bank

The importance of comparing payday loans

Although the regulation of loans is commonplace there are still many myths around what payday loans are. It is critical to not only assess the offers being made by payday lenders in great detail but to first establish if the payday loan is needed in the first place. There may be other financial solutions that fit your long-term financial goals better.

Thus, getting to grips with the features and price of the loan, as well as the interest rates and potential impact on your long-term financial stability, is a very important first step when assessing your options.

Do I need a payday loan?

Falling slightly short prior to your payday is a common scenario, and payday loans can be useful in bridging that gap without the need to commit to a long-term financial solution. This can be true both in your personal life but also if you run your own business.

It may be worth contemplating the following as alternatives first:

  • Do you have any friends or family that may be able to support you with an interest-free loan as a stopgap? While this can strain relationships, you may find support from those closest to you, particularly if your need for finance is a one-off.
  • Can your bank offer you some latitude with a loan, credit card or overdraft facility? This can be a cheaper alternative in the long run but be wary of overdraft charges that can in fact accumulate higher than payday loan fees. Credit cards in particular may be more detrimental as you may get stuck paying the minimum balance, so be sure to assess their rates and potential impact to you carefully.

Loan terms explained

Having considered these options and deciding that a payday loan is indeed your most viable solution, the next step is to analyse the various options available on the market.

The key criteria to evaluate initially is the interest rate, which is simply the additional cost attached to borrowing a certain amount of money also known as the principal. The principal plus the interest equal the total amount owed after the loan duration.

The interest rate is typically proportional to the amount borrowed, so for example a £300 loan will have a smaller amount of interest compared with a £3,000 loan. However, the rate can still be higher on the smaller loan. For example, you may find a lender that offers a 10% interest rate on a £300 loan compared with 5% on a £3,000 one.

These rates are determined by the lender and for long-term, larger loans are very much dependent on your credit score and history, which the lender ultimately uses to determine the level of risk in lending to you. Moreover, the length of borrowing time has a major impact on the level of interest, which is why a payday loan can be a viable solution for short-term needs.

What is the APR and how does this factor into payday loans?

The Annual Percentage Rate (or APR) is effectively the total amount of interest and fees associated with a loan for an entire year. For instance, if you were to take a loan of £300 with a 30% APR, in one year the entire amount owed will be £390 including all fees and charges.

Payday loan companies are often scrutinised because the APR on a short-term loan appears astronomically high. However, it is important to recognise that this is because they are not designed for long-term borrowing. These figures can often be misleading in this case, as a payday loan with a high APR paid back within a month can have a more cost-effective interest rate than a longer-term loan with a smaller APR.

Finding a good lender

Be sure to check the following details when assessing a payday loan company:

  • Ensure they are authorised by the FCA and appear on the Financial Services Register
  • Assess the professionalism of the website and their customer service
  • Review their contact information, including registered addresses and any further information about their management team

There are also lots of loan comparison sites available online that can help you quickly and easily compare prices but also offer insights from customer reviews and experiences that can help you decide if the company and product is right for you.

Compare with other Lenders

We're happy to put our money where our mouth is, so to speak, and compare our service with that of other lenders. We think we stack up well and provide the right service and the right loan product for your needs. We know that you have a choice who you borrow from, so we want to ensure you see the positives and the negatives of our firm when compared to other payday lenders.

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