Should I get a payday loan?

Should I get a payday loan?
Written by Mark Grimley
Published on 5th July 2017
Updated on 19th January 2022
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If you need cash fast a payday loan is an option, but they are expensive. Here are the pro and cons of payday and short term loans and how and where to find the best deals. Take control and choose wisely.

What is a payday loan?

A payday or short-term loan is a loan repaid over less than 12 months at a Representative APR over 99.9%.

When should I consider a payday loan?

Payday loans are designed to help with an unexpected emergency, like the car breaking down or the boiler packing up. They’re not suitable for everyday bills and longer term borrowing.

Payday loans are an expensive way to borrow and will impact your credit file so even in an emergency payday loans should be considered a last resort.

Here are some alternative ways to get cash quickly.

Can I get a payday loan?

Each lender has different acceptance criteria. The Choose Wisely eligibility checker takes less than 2 minutes to complete and will show which lenders you’re most eligible for.

The pros and cons of payday loans

Before you dive in for an application here’s a quick overview:

  • Bad credit considered
  • Small amounts available over a shorter term
  • Fast payout
  • High potential charges
  • High interest
  • Not suitable for long term borrowing
  • Not suitable if you're in financial difficulty

How much will a payday loan cost me?

It will change from lender to lender but the maximum they can charge is capped by the FCA:

An initial cap at 0.8% per day - interest and fees can’t be more than 0.8% per day of what you borrowed.

A £15 cap on default fees - if you default you can be charged £15 in fees but you still may have to pay interest.

A total cap of 100% - eg. If you borrow £100 the maximum you’ll ever repay is £200

Warning: Late repayment can cause you serious money problems. For help, go to

How to get the right loan

The Choose Wisely loan search will show you which lenders have provisionally accepted you before you apply. This removes the guesswork and gives you the power to choose the best loan for you.

Find Loans

Use the Choose Wisely Eligibility Checker to find a suitable lender in just a few minutes, without impacting your credit score.

Mark Grimley
Written by
Mark Grimley
Head of Partnerships & Take Control Author at Choose Wisely

Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.