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How payday loans work

The My Payday Loan Broker Blog

How payday loans work

How payday loans work

Payday loans are short-term loans originally designed to tide people over until payday.

The money is paid directly into your bank account, and you repay in full with interest and charges – at the end of the month.

Increasingly though, you can borrow for longer periods – typically three months (but longer loans are available) and repay in instalments.

What all these loans have in common is that they are high cost and short-term, and often for small amounts.

Normally you have until payday to pay back your loan plus interest, although some payday lenders let you choose the repayment period.

A payday loan is expensive and could make your situation worse if you can’t afford to pay it back on time. You need to think carefully before choosing one.

Source: https://www.moneyadviceservice.org.uk/en/articles/payday-loans-what-you-need-to-know