A payday loan gives you money before your next income arrives, leaving a repayment to fit around your next set of bills. We help you check for a potential loan match through a panel of FCA authorised lenders and brokers.
What is a payday loan?
Payday loans are small, short-term loans, traditionally cleared in one lump sum on your next payday. Many now have monthly instalments. They are unsecured, so you do not pledge an asset, but missed payments can still affect your credit file.
The cap that limits what you pay
The cap covers high-cost short-term credit only (APR of 100% or more, repaid within 12 months).
Borrow £200 and you will never repay more than £400 in total.
The FCA introduced the cap on 2 January 2015 alongside risk warnings and restrictions on rollovers and recurring payment collection. Its 2017 review found cheaper loans, better affordability checks and fewer borrowers with debt problems, and kept the cap. Its 2026 review found broad support for keeping the cap and, in September 2026, the FCA decided against the second stage of that review, so the cap stays as it is.
How payday loans work
You agree the repayment dates and total to repay before accepting a loan. Payments are usually collected by continuous payment authority from your debit card, or by direct debit.
- High-cost short-term credit cannot be rolled over (extended) more than twice.
- A lender can make no more than two failed attempts to collect a payment by continuous payment authority. You can cancel a continuous payment authority through your bank or card provider.
- Lenders must treat customers in financial difficulty fairly, which can include a revised payment plan. Contact the lender before a payment is missed.
Cancelling the payment authority does not cancel what you owe. Agree another way to pay with your lender.
Why the APR looks so high
APR expresses borrowing costs as a yearly percentage. A payday loan often lasts only weeks or months, so a charge over that short period can produce a high annual figure.
Compare APRs for loans of a similar amount and term. Check the total amount repayable in pounds and whether each payment fits your budget.
Checking your eligibility
Lenders usually ask for:
- Age 18 or over.
- UK residency.
- A regular income the lender can verify.
- A UK bank account.
FCA rules require every lender to check that you can afford the repayments before it lends, and lenders look at your credit history as part of that. Some lenders on our panel consider people with bad credit, but nobody can promise approval and no genuine lender offers loans with no credit check.
One soft search with us checks for a potential match without affecting your credit score. A lender carries out a hard search only if you formally apply, which can affect your score. Read more about how payday loans affect your credit.
Lower cost alternatives to check first
- A credit union. These not-for-profit lenders have interest capped by law. Check membership rules at Find Your Credit Union.
- An instalment loan. Repaying over a few months can reduce each payment, but a longer term can mean more interest overall.
- Benefits help. A Budgeting Advance may help with an unexpected one-off cost if you get Universal Credit. It cannot be used for ongoing costs such as food, household bills such as gas or electricity, rent, or paying off debts. If you get certain other benefits, check eligibility for an interest-free Budgeting Loan.
- A payment plan. Ask whoever you owe about spreading payments or hardship support.
How Dot Dot Loans fits in
We are a credit broker, not a payday lender. We check a panel of FCA authorised lenders and brokers, many of which offer short-term loans repaid in instalments. We are not a direct lender, we do not search the whole market, and we never charge you a fee.
After a potential match, you continue to the partner's website to complete an application. The lender makes the decision and confirms your rate and repayments before you agree. Read about direct lenders and brokers.
Borrowing responsibly
Only borrow if your repayments leave enough for essentials such as rent, food and energy. If you keep borrowing to cover regular bills or need a new loan to repay an existing one, speak to a free debt adviser before applying.
Free and impartial guidance is available from MoneyHelper, and free debt advice from StepChange.
Sources and methodology
Every figure in this guide is drawn from an official or independent authority, listed below. We do not link to other lenders or brokers. Where a statistic could change, we note when we last checked it, in October 2026.
Methodology: this guide is written in house by the Dot Dot Loans editorial team and reviewed by Paul Gillooly, Director of Dot Dot Loans, using published rules from the Financial Conduct Authority and figures from the sources above. It is general information, not financial advice. Representative Example: Borrow £1,000 over 18 months. 18 monthly repayments of £89.22. Total amount repayable: £1,605.96. Interest: £605.96. Annual interest rate: 59.97% (fixed). Subject to application approval by the lender. Not all lenders offer loans up to £5,000. Representative APR 79.5% (Variable). Any representative monthly repayment shown is for illustration only, based on our representative APR. Your actual repayments will be confirmed by the matching lender if your application is approved.