Definition
High-cost short-term credit (HCSTC)
High-cost short-term credit is the FCA's regulatory category for short-term loans with very high interest rates — typically payday loans and similar products. The FCA introduced a price cap on HCSTC to limit costs to borrowers.
Example
A payday loan charging 1,500% APR falls into the HCSTC category and is subject to FCA price cap rules.
Common misunderstandings
- FCA price caps limit what HCSTC lenders can charge — but HCSTC remains among the most expensive forms of credit available.