Credit intermediary not a lender. Representative Example: Amount of credit: £1000 for 11 months at £102.22 per month. Total repayment of £1226.64. Interest: £226.64 Interest rate: 47.5% pa (fixed). APR rates range from 9.3% APR to 102.5%.
Understanding Payday Loans
A payday loan isn’t very different from any other loan. They get their name from the method by which you repay them. The payment is due on one's next paycheque one receives after getting a loan.
Payday loans are typically short-term, small-sum loans that range from £50 to £1500.† They’re designed to help people get through a difficult financial situation, or an unexpected expense. Think about the last time an unexpected bill came due, your bank account was low, and your next paycheque was not going to come soon enough. A UK payday loan may have helped you avoid late fees or bank fees. Or maybe you had an emergency like a pipe that had burst in your home, or some other repair that couldn’t wait.
QuickQuid Arranged Payday Loans Online
When life throws a problem at you, an entire day or even one hour in some cases can be a lot of time, especially in our fast-paced world. Sometimes you need a loan as soon as possible, and QuickQuid can get you cash, if approved, within 10 minutes after approval.§ We also offer 24-hour service, 365 days a year. You can even apply on weekends and bank holidays.
People are looking for cheap loans every day in the UK but they may not be available to them. Often times people turn to shorter term, higher interest rate alternatives such as payday loans to help them through their credit crunch. It's important to keep in mind that loans are always meant to be used responsibly. These loans should only be used as solutions for temporary money issues and are not designed to be used as a long-term solution.
Payday Loans Are Still Highly Popular
With all the negative press that payday loans have received over the last 15 years, you might be forgiven for believing that demand for them was low among UK borrowers. Surprisingly, for many in the media, but not for those who operate in personal finance, the demand is almost at the same level it was 15 years ago. Remember, it wasn't the lack of demand that caused almost 300 payday lenders to leave the market; it was overbearing regulation and unfair penalties for the mis-selling of lawful products. There is no doubt that the search numbers for payday loans are not as high as they were in 2008, but one has to remember that lenders are no longer advertising their products as much.
There's no doubt that customers like the simplicity of these single-installment loans, which can carry them through to their next payday, where they can repay the money in full. On some of our other brands, we regularly speak to customers, and they constantly tell us that they would prefer to borrow smaller amounts over one pay period. In contrast, we have observed over the last six years that lenders are willing to lend more than the customer wants or needs, and for a longer duration. Although the APRs are lower, borrowers end up paying more in actual cash terms on these types of loans because they roll over multiple times, whereas a payday loan only rolls over once.
In short, customers don't always favour multi-installment loans because they tend to encourage them to borrow more over a longer period.
How do payday lenders decide on applications?
To be considered for a payday loan an applicant must have a valid UK bank account, be at least 18 years old, be employed and receive a regular income, and a resident of the UK. If they meet these criteria, then they can apply online. Once an applicant submits their application, the lender will review all of the information and make a loan decision, typically within 2 minutes or less. While each lender's underwriting system is different, it's important for a lender to assess each applicant to make sure they're worth the risk. Underwriting is a process that large financial service providers use to assess the eligibility of a customer and likelihood that such customer can pay the loan back.
Payday Loan Q&A
Some FAQs
Payday Loans have been banned in the UK, why are you still offering them?
Payday loans have never been banned in the UK. In 2014, the Financial Conduct Authority proposed a number of changes, including a price cap for high-cost short-term credit products, such as payday loans. These changes, along with several others, convinced a majority of lenders to cease offering these extremely short-term loans. In fact, 90% of those that exited the market did so voluntarily, while others were forced into administration. Some brands were resurrected, while others have not been seen since.
Loans with a duration of one month or less fully comply with the laws and regulations in the UK as of 2023.
What happened to other payday lenders like Wonga?
Wonga entered administration in the second half of 2018, at which point they immediately stopped offering new loans in the UK. They cited fines for historic mis-selling of payday loans as the primary reason for their collapse. At one stage, it is estimated they paid out over £300 million in compensation to former customers. Unfortunately, this wasn't sufficient, and with no resolution in sight, Wonga filed for insolvency.
From 2006 to 2018, Wonga was, by a significant margin, the largest online payday lender in the UK, serving millions of customers. Due to the way Wonga was structured, there remains a strong possibility that the brand could make a comeback in the future. The trading name's intellectual property rights are still held by a company that never entered insolvency. In essence, the brand could reemerge at any time, with no connection to the company that went bankrupt in 2018.
Is it easier to get approved for payday loans?
Normally, it would be safe to say that being approved for a payday loan is easier than being approved for a multi-installment type loan. There are two main reasons for this. First, the loan amount is generally lower for a payday loan. Second, the period between the loan's initiation and its completion is much shorter, typically resulting in fewer potential issues that could arise in a borrower's life.
These two factors combine to present less risk to the lender, often resulting in a lower barrier to entry for loans that extend until the next payday.
What was the highest ever Payday Loan APR?
To see if you qualify for a QuickQuid arranged loan, you first have to apply online. As long as you're 18 years of age, have a valid UK bank account, are employed and receiving a regular income, and a resident of the UK, you can apply at QuickQuid! After you apply, we will have your application processed by one of our partners and will give you a decision instantly.
What was the highest ever Payday Loan APR?
In 2010, we observed one lender charging an APR of 22,700% on a payday loan. This exorbitant rate was quoted to someone seeking a £500 loan until their next payday, with the repayment totaling £750 (£500 for the loan and £250 for the interest). The reason for the exceptionally high APR was that the borrower's next payday was scheduled for the day after they received the loan. While the loan duration was just one day, when extrapolated over a year for the purpose of calculating an APR, it resulted in an astonishingly high figure of 22,000%.
We won't mention the specific lender, but we remember the media creating sensational headlines about loan sharks. The loan was undoubtedly very expensive, but the 22,000% APR was used to provoke an emotional response from their readers. In reality it was simply a quirk of their computer system. If the payday would have been 30 days away, the amount to be repaid would have been the same (£250 interest), but the APR would have been a lot less.
Will former payday lenders one day return to the UK?
Some lenders have already made changes, though their current setup is entirely different from how it was structured before 2015. For instance, prior to 2015, direct lenders were often integrated into the same company that held their branding and intellectual property rights. Unfortunately, this meant that if they faced unexpected fines or a high volume of complaints, the entire business structure, including branding and intellectual property rights, was jeopardised.
What lenders now do is establish their branding and intellectual property rights within a company authorised solely to broker loans. They may have a separate company that is authoried to lend money to the public. By adopting this approach, they can protect their valuable intellectual property rights if any issues arise within the lending company.
In essence, you'll notice a greater number of brands acting as brokers rather than lenders. Lenders will operate discreetly in the background, with the customers who borrow directly from them experiencing the difference.
How much can I borrow through QuickQuid?
At QuickQuid, new customers can apply for up to £1500.† If you're already an existing QuickQuid customer, you can apply for up to £2000.† To find out how much you qualify for, apply online today and complete our straightforward application.
If approved, what can I use the payday loan for?
Payday loans are best used for emergency and unexpected expenses, particularly overdue bills and auto repair bills. Please remember that our loans should only be used for short-term financial needs and are not appropriate for long-term borrowing.
