{"id":27464,"date":"2026-05-05T08:05:24","date_gmt":"2026-05-05T08:05:24","guid":{"rendered":"https:\/\/www.lendingstream.co.uk\/blog\/?p=27464"},"modified":"2026-05-05T08:05:32","modified_gmt":"2026-05-05T08:05:32","slug":"are-payday-loans-bad","status":"publish","type":"post","link":"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/","title":{"rendered":"Are Payday Loans Bad?"},"content":{"rendered":"\n<p>Is a payday loan bad? It depends on how you use them. This guide gives you the facts so you can choose wisely.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a2e1a2c021e5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a2e1a2c021e5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_is_a_payday_loan\" >What Is a Payday Loan?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#how_do_payday_loans_work\" >How Do Payday Loans Work?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_is_a_continuous_payment_authority\" >What Is a Continuous Payment Authority?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_are_payday_loan_interest_rates\" >What Are Payday Loan Interest Rates?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_did_the_fca_do_about_payday_loan_costs\" >What Did the FCA Do About Payday Loan Costs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_happens_if_you_miss_a_payment\" >What Happens If You Miss a Payment?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_is_a_debt_trap\" >What Is a Debt Trap?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#can_payday_loans_affect_your_credit_score\" >Can Payday Loans Affect Your Credit Score?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#are_payday_loans_bad_for_people_with_bad_credit\" >Are Payday Loans Bad for People With Bad Credit?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_is_predatory_lending\" >What Is Predatory Lending?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#are_payday_loans_bad_for_your_mental_health\" >Are Payday Loans Bad for Your Mental Health?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_are_the_risks_of_a_payday_loan\" >What Are the Risks of a Payday Loan?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#are_payday_loans_ever_a_good_idea\" >Are Payday Loans Ever a Good Idea?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_are_the_alternatives_to_payday_loans\" >What Are the Alternatives to Payday Loans?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#credit_unions\" >Credit Unions<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#personal_loans\" >Personal Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#arranged_overdraft\" >Arranged Overdraft<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#budgeting_loans\" >Budgeting Loans<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#cash_advances\" >Cash Advances<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#price_comparison_sites\" >Price Comparison Sites<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_about_short_term_loans_from_other_lenders\" >What About Short Term Loans From Other Lenders?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#where_can_you_get_free_debt_advice\" >Where Can You Get Free Debt Advice?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-23\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#what_should_you_check_before_taking_a_payday_loan\" >What Should You Check Before Taking a Payday Loan?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-24\" href=\"https:\/\/www.lendingstream.co.uk\/blog\/are-payday-loans-bad\/#final_thoughts\" >Final Thoughts<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_is_a_payday_loan\"><\/span><strong>What Is a Payday Loan?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A payday loan is a short term loan. You borrow a small amount of money. You pay it back on your next payday. A payday loan is a type of unsecured loan. No asset is used as security. They are for short term use only.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"how_do_payday_loans_work\"><\/span><strong>How Do Payday Loans Work?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>When you get a payday loan, you agree to repay the full amount plus interest on a set date. Most payday lenders collect repayment using a Continuous Payment Authority (CPA). A CPA allows the lender to take money directly from your bank account on the repayment date. This can cause problems if you do not have enough money in your account. A lender will always tell you the repayment date before you sign.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_is_a_continuous_payment_authority\"><\/span><strong>What Is a Continuous Payment Authority?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A Continuous Payment Authority (CPA) is not the same as a direct debit. With a direct debit, you have more control over payments. With a CPA, the lender takes money from your bank account on an agreed date. This can leave you without enough funds for essential bills.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_are_payday_loan_interest_rates\"><\/span><strong>What Are Payday Loan Interest Rates?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"532\" height=\"399\" src=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-are-payday-loans-bad.jpg\" alt=\"Why are payday loans bad\" class=\"wp-image-27467\" srcset=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-are-payday-loans-bad.jpg 532w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-are-payday-loans-bad-300x225.jpg 300w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-are-payday-loans-bad-80x60.jpg 80w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-are-payday-loans-bad-265x198.jpg 265w\" sizes=\"(max-width: 532px) 100vw, 532px\" \/><\/figure>\n\n\n\n<p>Payday loans have very high interest rates. Interest is charged daily, so costs go up fast. In 2019 the average annual percentage rate on a payday loan was as high as 1,250%. This was far higher than the average APR of around 20.7% for credit cards.<\/p>\n\n\n\n<p>APRs for payday loans have exceeded 1,500% in some cases. Payday loans often feature annual interest rates exceeding 1,000% APR. Read more <a href=\"https:\/\/www.fca.org.uk\/data\/consumer-credit-high-cost-short-term-credit-lending-data-jan-2019\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_did_the_fca_do_about_payday_loan_costs\"><\/span><strong>What Did the FCA Do About Payday Loan Costs?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/financial-conduct-authority\/\" target=\"_blank\" rel=\"noreferrer noopener\">Financial Conduct Authority<\/a> introduced new rules in 2014. This led to a <a href=\"https:\/\/www.fca.org.uk\/news\/press-releases\/fca-confirms-price-cap-rules-payday-lenders\" target=\"_blank\" rel=\"noreferrer noopener\">35% drop<\/a> in the number of payday loans and the amount borrowed in the first five months. Online payday lenders must legally publish their rates on at least one price comparison site. Borrowers can then compare deals before they commit.<\/p>\n\n\n\n<p>The Financial Conduct Authority brought in rules to protect borrowers. From 2 January 2015, there is an interest cap of 0.8% per day on payday loans. No borrower should ever have to pay back more than twice what they borrowed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_happens_if_you_miss_a_payment\"><\/span><strong>What Happens If You Miss a Payment?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Missing a payment on a payday loan often results in default fees being added onto the loan. The FCA has capped this fee at \u00a315. This can make it hard to repay what you owe. You may owe money on top of what you first borrowed. It can push you deeper into debt. However, you will never repay more than twice the amount originally borrowed.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_is_a_debt_trap\"><\/span><strong>What Is a Debt Trap?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A debt trap is when you borrow money to pay off a loan but end up owing more than before. Many borrowers struggle to repay payday loans. They roll over the loan. Then take out new loans to pay off existing ones.<\/p>\n\n\n\n<p>In 2013 <a href=\"https:\/\/publications.parliament.uk\/pa\/cm201314\/cmselect\/cmbis\/789\/789.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">around 30%<\/a> of payday loans were rolled over or refinanced. Because borrowers could not pay on time. The FCA limits rollovers to two times. So a lender cannot keep rolling over the same loan. But payday borrowers can still fall into a debt spiral if they are not careful.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"can_payday_loans_affect_your_credit_score\"><\/span><strong>Can Payday Loans Affect Your Credit Score?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Yes. A history of payday loans can hurt your credit score. It could lead to mortgage rejections. Applying for many payday loans in a short time can also damage your credit score. Even if you repay on time, having used payday loans may make other lenders cautious about lending to you.<\/p>\n\n\n\n<p>Read our article on <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-to-check-your-credit-score\/\" target=\"_blank\" rel=\"noreferrer noopener\">how to check your credit score<\/a> for more tips.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"are_payday_loans_bad_for_people_with_bad_credit\"><\/span><strong>Are Payday Loans Bad for People With Bad Credit?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"532\" height=\"399\" src=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-should-you-avoid-payday-loans.jpg\" alt=\"Why should you avoid payday loans\" class=\"wp-image-27466\" srcset=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-should-you-avoid-payday-loans.jpg 532w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-should-you-avoid-payday-loans-300x225.jpg 300w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-should-you-avoid-payday-loans-80x60.jpg 80w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-should-you-avoid-payday-loans-265x198.jpg 265w\" sizes=\"(max-width: 532px) 100vw, 532px\" \/><\/figure>\n\n\n\n<p>People with bad credit often turn to payday loans. But payday loans often come with high interest. This can make things worse. Payday loans are not a fix for existing debts or low income problems.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_is_predatory_lending\"><\/span><strong>What Is Predatory Lending?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Predatory lending is when a lender gives a loan on unfair terms. The lender often targets people who are in a tough spot. High cost loans and unclear terms are a sign of this. Always check that a lender is approved by the Financial Conduct Authority before you borrow.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"are_payday_loans_bad_for_your_mental_health\"><\/span><strong>Are Payday Loans Bad for Your Mental Health?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>High cost debt is strongly linked to mental health issues. Such as stress, anxiety, and depression. If you are struggling to repay a loan and the interest keeps growing, it can cause real harm. The risks of payday loans go beyond money.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_are_the_risks_of_a_payday_loan\"><\/span><strong>What Are the Risks of a Payday Loan?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There are real risks to know before you borrow money. Interest grows daily. Borrowing money from a payday lender may be costly if you are not prepared. Late payment fees add to the total. Rollovers may increase what you owe. Your credit score can drop if payments are missed. Payday loans are not right for everyone.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"are_payday_loans_ever_a_good_idea\"><\/span><strong>Are Payday Loans Ever a Good Idea?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Payday loans are not always a bad idea. They can help in a real emergency when no other option is there. But they should be a last resort. If you cannot repay the full lump sum on your next payday, a payday loan may make things worse.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_are_the_alternatives_to_payday_loans\"><\/span><strong>What Are the Alternatives to Payday Loans?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"532\" height=\"399\" src=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-do-people-go-for-payday-loans.jpg\" alt=\"Why do people go for payday loans\" class=\"wp-image-27465\" srcset=\"https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-do-people-go-for-payday-loans.jpg 532w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-do-people-go-for-payday-loans-300x225.jpg 300w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-do-people-go-for-payday-loans-80x60.jpg 80w, https:\/\/www.lendingstream.co.uk\/blog\/wp-content\/uploads\/2023\/07\/Why-do-people-go-for-payday-loans-265x198.jpg 265w\" sizes=\"(max-width: 532px) 100vw, 532px\" \/><\/figure>\n\n\n\n<p>There are alternatives to payday loans that cost less and carry less risk.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"credit_unions\"><\/span><strong>Credit Unions<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Credit unions are an alternative to payday lenders. They offer affordable loans even for those with poor credit records. They usually carry out a credit check. They also look at your situation and whether you can afford to repay. They are not-for-profit and put members first. A credit union is often a safer choice than a payday lender.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"personal_loans\"><\/span><strong>Personal Loans<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Personal loans can be a cheaper form of borrowing than payday loans. They are unsecured loans. With a typically lower interest rate. Although approval usually requires a decent credit record. A personal loan is paid back in set monthly payment amounts. This makes budgeting easier.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"arranged_overdraft\"><\/span><strong>Arranged Overdraft<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>An arranged overdraft lets you borrow a set amount from your bank. Interest rates typically range from 15% to 40%. This is lower than payday loan rates. This can be a safer way to borrow extra money short term.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"budgeting_loans\"><\/span><strong>Budgeting Loans<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Budgeting loans from the government are interest-free loans. They are for people on certain benefits for six months or more. They help cover basic costs with no added debt. This is worth checking if you are on a low income.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"cash_advances\"><\/span><strong>Cash Advances<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Some banks offer cash advances as part of your account or credit card. These may have fees but may be cheaper than a payday loan. Always compare the cost first.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"price_comparison_sites\"><\/span><strong>Price Comparison Sites<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Use a price comparison site to find cheaper options. By law, online payday lenders must list their rates on at least one comparison site. This lets you compare loans before you decide.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_about_short_term_loans_from_other_lenders\"><\/span><strong>What About Short Term Loans From Other Lenders?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><a href=\"https:\/\/www.lendingstream.co.uk\/loans\/short-term-loans\/\" target=\"_blank\" rel=\"noreferrer noopener\">Short term loans<\/a> from banks may have lower rates than payday loans. Traditional lenders like banks often charge less interest than payday loans. Always check the repayment plan and full cost before you sign.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"where_can_you_get_free_debt_advice\"><\/span><strong>Where Can You Get Free Debt Advice?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Free advice is available if you need it. Debt charities like National Debtline and StepChange offer free, confidential help for people in debt. They can help you look at your options and make a repayment plan. Getting debt advice early can stop things from getting worse.<\/p>\n\n\n\n<p>Learn more about <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-to-get-out-of-debt\/\" target=\"_blank\" rel=\"noreferrer noopener\">how to get out of debt<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"what_should_you_check_before_taking_a_payday_loan\"><\/span><strong>What Should You Check Before Taking a Payday Loan?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Check the lender is on the FCA register. Look at the annual percentage rate and the full repayment amount. Ask about part payment or money transfer options if you&#8217;re unable to repay the full amount. Or need to move money between accounts to make a payment. Never borrow more than you can pay back by your next payday.<\/p>\n\n\n\n<p>Check out <a href=\"https:\/\/www.lendingstream.co.uk\/blog\/advantages-and-disadvantages-of-payday-loans\/\" target=\"_blank\" rel=\"noreferrer noopener\">the pros and cons of payday loans<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"final_thoughts\"><\/span><strong>Final Thoughts<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>So is a payday loan bad? It can be. Payday loans can have high interest rates and extra fees. These are real risks for borrowers who cannot repay on time. But rules are in place to protect you. And there are alternatives to payday loans that may work better for you.<\/p>\n\n\n\n<p>Always compare your options. Only borrow what you need. Get free debt advice if you are not sure. The best way to borrow wisely is to stay informed.<\/p>\n\n\n\n<p><strong>Disclaimer:<\/strong> The information given above is provided for information purpose only. This is not financial advice.<\/p>\n\n\n\n<p><strong>Related guides:<\/strong><\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/how-to-get-accepted-for-a-payday-loan\/\" target=\"_blank\" rel=\"noreferrer noopener\">How To Get Accepted for a Payday Loan<\/a><\/strong><\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/what-should-you-look-for-in-payday-loans-direct-lenders\/\" target=\"_blank\" rel=\"noreferrer noopener\">What Should You Look for In Payday Loans Direct Lenders<\/a><\/strong><\/p>\n\n\n\n<p><strong><a href=\"https:\/\/www.lendingstream.co.uk\/blog\/benefits-of-payday-loans\/\" target=\"_blank\" rel=\"noreferrer noopener\">Benefits of Payday Loans In The UK<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Is a payday loan bad? It depends on how you use them. This guide gives you the facts so you can choose wisely. What Is a Payday Loan? A payday loan is a short term loan. You borrow a small amount of money. You pay it back on your next payday. A payday loan is [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":27468,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[267],"tags":[],"class_list":["post-27464","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-loans"],"_links":{"self":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/27464"}],"collection":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=27464"}],"version-history":[{"count":3,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/27464\/revisions"}],"predecessor-version":[{"id":28194,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/posts\/27464\/revisions\/28194"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media\/27468"}],"wp:attachment":[{"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=27464"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=27464"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.lendingstream.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=27464"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}