Definition · Glossary
Payday loan
In plain English
A short-term, high-cost loan designed to be repaid on your next payday. APRs on payday loans are typically very high — sometimes thousands of percent. Regulated by the FCA since 2015, with a daily interest cap of 0.8%.
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Example
A £200 payday loan repaid in 30 days at 0.8% per day costs £48 in interest — an APR of approximately 1,500%.