Credit & Debt

The UK’s Best Payday Loans in 2021

If you’ve found yourself short on cash this month, one possible solution is a payday loan. These short-term loans are designed to help you out in situations where you need a relatively small amount of money quickly – for a broken washing machine or an unexpected car repair, for example.

In this article, we’ll look at the UK’s best payday loans followed by a breakdown on how payday loans work, how much they’ll cost you, alternatives to payday loans, and also how to avoid common payday loan mistakes that can lead you into debt.

Let’s get started

The Best Payday Loans in the UK – Top 7

1. Mr Lender

Mr Lender Logo

Founded in 2008, Mr Lender is one of the UK’s oldest and most best payday lenders backed by over 30,000 verified customer reviews across their Trustpilot and profiles with an overall customer rating of 4.8 out of 5-stars.

Max. Loan: £200
Min. Loan:  £1,000
Repayment Terms: 3-6 months

Rep. APR:
Borrow £200 for 6 months, repay with 6 payments — payment 1: £81.33, payment 2: £73.23, payment 3: £65.13, payment 4: £57.33, payment 5: £49.24, payment 6: £41.14 . Rate of interest 0.80% per day on outstanding capital. Total repayable £367.40 (based on 30 day periods). Interest rate 292% per annum (fixed). Representative 1,248.3% APR.


2. Money Boat Loans

Money Boat Loans

Money Boat is top-rated payday lender who has been helping UK consumers with access to quick cash for over 6 years now, boasting an overall customer rating of 4.7 out of 5-stars on their Trustpilot profile from a total of 4,683 verified customer reviews

Max-Loan: £200
Repayment Terms:
2-6 months

Rep. APR:
Borrow £400 for 4 months, four monthly repayments of £149.37. Total repayment £597.48, interest rate p.a. (fixed) 255.5%. Representative APR 939.5%. Compare Moneyboat loans.


3. Quid Market

Quid Market Loans

Quid Market is one of the newer payday lenders in our review, founded in 20016, they have an overall Trustpilot rating of 4.3 out of 5-stars from a total of 639 verified customer reviews.

Max-Loan: £300
Repayment Terms:
3-6 months

Rep. APR: Borrow £300 for 3 months. Interest payable £154.37. Total amount payable: £454.37 in 3 instalments. 3 payments of £151.46. Representative 1301% APR. Interest rate 292% per annum (fixed). Maximum APR 1625.5%


4. Cash Float

Cash Float Loans

Cash Float offers UK consumers a wide range of credit options from personal loans to business loans and their so-called ‘payday loans 2.0’ which were designed for emergency use, allowing customers to quickly borrow money, even with poor credit scores. Their profile boasts a customer rating of 4.8 out of 5-stars from 621 verified customer reviews.

Max-Loan: £500
Repayment Terms:
3-6 months

Rep. APR: Borrow £900 for 7 months. 1st monthly repayment of £187.92, 5 monthly repayments of £250.56, last monthly repayment of £125.27. Total repayment £1,565.99. Interest rate p.a. (fixed) 198.72%. RAPR 529.09%


5. Cash ASAP

Cash ASAP Loans

Cash ASAP is another top-rated UK payday lender with an overall Trustpilot rating of 4.4 out of 5-stars from a total of 1,854 verified customer reviews. They have been in business since 2011 with no signs of slowing down.
Max-Loan: £150
Repayment Terms:
3-6 months

Rep. APR: £250 loan for 3 months at a fixed interest rate of 290% pa. Total amount payable is £321.51 in monthly instalments of £93.26, £124.38 and £103.87. This is based on the amount of credit plus interest, no other fees apply. Representative 1288% APR


6. Drafty

Drafty Logo

Drafty offers customers a new approach to lending with their unique ‘line of credit’ product offering which aims to combine the best bits from traditional payday loans, overdrafts and credit cards. They were founded in 2014 and have a Trustpilot rating of 4.5 out of 5-stars from over 9,698 verified customer reviews.

Repayment Terms:
Open line of credit

Rep. APR: Drafty is a credit line with a Representative 89.7% APR, and a maximum APR of 91.2%. If you draw £50 against your credit line at 89.7% APR, it would be paid off in 6 months for a total of £60. There are no additional fees.


7. Lending Stream

Lending Stream Loans

Lending Stream was founded in 2008 and is owned by the same parent company (Gain Capital LLC) as the above lender Drafty.  Lending Stream has a combined 40,000 verified customer reviews across their Trustpilot and profiles boasting an overall customer rating of 4.7 out of 5-stars.

Repayment Terms:
2-6 months

Rep. APR: Maximum APR 1721%. Given a Representative APR is 1333%, if you borrow £200 over 6 months at 292.0% p.a. (fixed), you would owe 6 equal repayments of £64.44. You will repay £386.61 in total. There are no additional fees.


What are payday loans?

A payday loan is a small, short-term loan of between £100 and £1,000. Originally, they were only designed to tide you over until the next payday, hence the name. Today, though, most lenders offer the option to repay in either a lump sum on an agreed date or in a series of instalments over a period of weeks or months. The repayments are usually taken from your bank account automatically by way of a continuous payment authority, or CPA.

Are payday loans legal in the UK?

Yes, payday loans are legal in the UK under the Consumer Credit Act of 1974 and all legitimate payday lenders must possess a license from the Financial Conduct Authority (FCA). Advertising of payday loans is regulated by the Advertising Standards Authority (ASA) and has become stricter over the years, being completely banned by many advertising giants including Google & Facebook.

How much does a UK payday loan cost?

As with any credit product, there are fees and charges associated with taking a payday loan. These can include:

  • The interest the lender charges on the loan, displayed as the APR (more on that below).
  • Set-up fees.
  • Admin fees, e.g. for changing the terms of the loan.
  • Late repayment or default charges if you miss a payment.

Read the fine print carefully and make sure that you factor in all of these potential charges when you’re deciding if a payday loan is affordable for you. Keep in mind that you’ll often be charged interest on things like late repayment fees, too, and you might also incur a failed payment charge from your bank.

What is APR?

APR stands for “annual percentage rate”. It’s a percentage amount that tells you how much interest, fees and other costs you’ll be charged over a 12-month period of borrowing. There are a few different types, the most common of which are:

  • Standard or Actual APR – this is the actual amount in interest and fees that you’d be charged ever year.
  • Representative APR – this is the lowest APR that at least 51% of customers would be offered, depending on their credit status.
  • Typical APR – this is the lowest APR that at least two thirds of customers would be offered, subject to credit status.

Most payday loans are marketed with a representative APR. So let’s say you’re applying for a loan with an 850% representative APR. That means that at least 51% of successful customers will receive an actual APR of 850%. However, when you submit your application and your lender has completed credit checks, they may decide to charge you a much higher actual APR. You’d then pay more in interest.

NOTE: Your lender is legally required to inform you of the actual APR you’ll pay before you sign a contract. Be sure to double-check the amount before signing!

Payday loans have a much higher APR than longer-term credit products, which can make an 850% APR seem wildly expensive at first glance. However, APR is based on the interest you’d pay if you borrowed for 12 months, while payday loans only cover a few weeks or months. While they’re still an expensive credit option, they’re not quite as expensive as the APR would make them appear.

To assess and compare payday loans, it’s better to look at the daily interest rate, the interest per £100, and/or the total amount of interest repayable. Lenders should provide you with this info during the application process.

How do I apply for a payday loan?

You can apply for a payday loan directly on the provider’s website. Here, you’ll tell the lender how much you’d like to borrow and for how long. They should tell you:

  • The representative APR of the loan.
  • How much interest you’ll be charged for the loan.
  • Any charges you’ll incur if you miss your repayment date.
  • Any other fees included in the loan.

If you accept the terms, the lender will then guide you through the full application. At a minimum, you’ll need to provide:

  • Your name and date of birth.
  • 3 years’ address history.
  • Details of your income and employment status.
  • Details of the bank account you’ll use for repayments.

You may also be asked about:

  • Your regular outgoings, like rent or mortgage, utilities and childcare costs.
  • Other credit obligations, like loan repayments or overdraft fees.
  • Other people and dependents in your home.

The application will involve a credit check, where the lender will look at your credit report to see how you’ve handled credit in the past. They’ll be looking for things like:

  • The amount of credit you currently have.
  • The amount of credit you’re currently using.
  • Whether you’ve missed any payments.
  • Whether you’ve defaulted on other credit agreements.
  • Any county court judgements (CCJs) against you.
  • Any debt management plans or bankruptcy.

Can I get a payday loan if I have bad credit?

All loan providers set their own individual criteria, so it’s difficult to say whether poor credit will prevent you from getting a payday loan. However, the criteria for payday loans are more relaxed than those for other types of credit, like credit cards, long-term loans and overdrafts. Some providers will overlook adverse information on your credit report, but others may not.

How quickly can I get a payday loan?

The decision is usually very quick. If you pass the credit check, you‘ll agree to your offer and sign a digital contract, and then the money will be in your account within hours or even minutes.

In some cases, the lender may need to complete additional checks before accepting your loan. These are generally quick, but can take up to 72 hours.

How do I find a responsible payday loan provider?

Payday loans have received lots of negative publicity in recent years, with many lenders branded predatory, and some being forced into administration.

It’s true that some lenders have used extremely unethical practices, like misleading advertising and lending to people who clearly can’t afford the repayments. Some also tempted their customers with bigger loans or extensions, even as they knew the customer was struggling to meet repayments.

However, the Financial Conduct Authority (FCA) took over regulation of the payday loan industry in 2015 and launched a huge crackdown on predatory lending, bringing in more legal protections for customers. We’ll discuss those in a moment, but first let’s talk about what to look for in a good payday lender:

  • FCA authorisation.
  • Voluntary codes of conduct.
  • Low representative APR.
  • Reasonable late repayment fees.
  • Reasonable set-up and admin charges or, better yet, no charges at all.
  • No penalty for early repayment.
  • Positive reviews on third-party websites like TrustPilot, Google and Facebook.

Also look for companies that practice responsible marketing, as this is a good indication of how they’ll conduct themselves once you’ve signed a legally binding agreement with them. Avoid companies that:

  • Use fear-based marketing or pressure tactics.
  • Encourage you to take out credit for things you don’t need.
  • Hide important information or make it vague or difficult to find.
  • Appear to violate FCA rules and regulations.

Regardless of the lender you choose, you can still find yourself in financial difficulty if you misuse payday credit…

What are the disadvantages of payday loans?

Payday loans are only meant for short-term borrowing, when you need cash quickly but you know you’ll have the money to pay it back. When used as intended, they can be incredibly helpful in a financial pinch. However, there are some potential pitfalls.

Payday loans have a very high APR. That means that if you miss a repayment, your interest can quickly get out of control. You may also be charged late fees, and you’ll have to pay interest on those too.

Many people then fall into the “debt trap”, where they extend or “rollover” their loan with their current provider, or take out a bigger high-interest payday loan to pay off their existing one. It’s not long before they’re taking out an even bigger loan to pay for the second one. And so the cycle continues…

To avoid falling into the debt trap, it’s important that you only take out a payday loan if you’re sure you’ll have the money to repay it in full, on time. If you’re in general financial distress and you’re borrowing to meet your basic needs, then ask yourself if your situation is likely to improve in the short time before your loan comes due. If not, then you’re only buying a temporary reprieve before your financial troubles get worse.

How am I legally protected?

The payday loan market is now regulated by the Financial Conduct Authority (FCA). As such, providers must be registered with the FCA, and they must abide by the following rules when offering you a payday loan:

  • A lender must perform adequate affordability and credit checks when assessing your application.
  • Your daily interest rate will be capped at 0.75%. That means that a 30-day loan of £100 can cost you no more than £24 in interest.
  • The maximum charge for a missed payment is £15.
  • Your loan cannot be extended or “rolled over” more than twice.
  • Your repayment is capped at 100% of the original amount, including all interest and fees.

Previously, people in financial difficulty would find themselves hit with charge after expensive charge, and interest would just keep piling up. These rules are designed to protect you from accumulating endless debt, and to prevent unethical lenders from exploiting your situation.

You can usually find details of a lender’s FCA registration at the bottom of their website pages, along with a registration number. However, if this information isn’t readily available, you can check the FCA’s Financial Service Register. If the lender is not listed on the register, steer well clear and report them to the FCA’s Consumer Helpline on 0800 111 6768.

You can also report a loan provider to the Financial Ombudsman. Here are just a few examples of scenarios in which you could make a complaint:

  • They didn’t make it clear how much you’d pay in interest or fees.
  • You were given incomplete or inaccurate information about loan repayments.
  • They didn’t check if you could afford the loan repayments.
  • They didn’t explain to you how your repayments would be taken.
  • They didn’t warn you about the risks or penalties of late repayment.

Alternatives to payday loans

If you’re satisfied that a payday loan is the right lending solution for you, then we are confident one of the many direct lenders above will meet your needs. However, if you’re looking for a payday loan alternative, consider the following options:

Borrow from family or friends instead. We’ve all found ourselves strapped for cash at some point, so a loved one may be sympathetic to your money worries. It’ll be much cheaper than a payday loan, but keep in mind that not repaying could be damaging to your relationship. Treat it like a formal loan, discuss what will happen if you struggle to meet the repayments, and get everything down in writing.

Ask for an advance. If you’re employed and you’re trying to meet an unexpected cost, a supportive boss might agree to give you an advance on your wages. If you’re a new benefit claimant or your payment is late, speak to your benefits provider about an advance or “bridging” payment.

Get a credit card. If you’ve got bad credit, you might worry about being refused for a credit card. However, there are lots of cards designed to help you build your credit score back up. You’ll pay a higher interest rate, but if you repay the balance in full every month, or even make large repayments, this will still work out cheaper than a payday loan.

Ask for an overdraft. Your bank may be able to give you a small overdraft or extend your current one. Again, this can be an expensive way to borrow, but provided you pay it off as quickly as you can, it’s still cheaper than a payday loan.

Try a credit union loan. A credit union is a financial co-op owned and managed by its members. They offer low-interest loans capped at:

3% a month or 42.6% a year APR for England, Scotland and Wales.
1% a month or 26.8% APR for Northern Ireland.

Ask for help. If you’re struggling to pay for your essentials, you may be able to get an interest-free loan from the Social Fund. You may also qualify for help from your local welfare assistance scheme.

Speak to the experts. Finally, if you’re in serious financial difficulty because of debt, please contact a debt specialist instead of taking any form of credit. You can contact National Debtline, a free debt advice charity, on 0808 808 4000.

This article was put together by our in-house financial experts.