WARNING: Late repayment can cause you serious money problems. For help, go to: moneyadviceservice.org.uk

Payday Loans

What is a 1 hour loan?

Payday loans and payday lenders have become a common form of short term lending to cover an emergency expense. This has led to a large amount of Payday Loan companies entering the market, some of which are not responsible in the way that they lend money.

PiggyBank is different. We’re a safe, simple and human short term lending solution. We carry out extensive affordability and credit checks to make sure that our loans are right for you, making us one of the most responsible lenders on the market.

See how much a short term loan with PiggyBank will cost you.

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

What is a payday loan?

A Payday Loan is a small, short term loan provided by a payday lender, which is intended to cover your expenses until your next payday. Payday loans range from between £100 and £400, depending on your credit history and your ‘trust’ with the lender.

The interest rates may seem high, as they are displayed as a compounded annual interest rate. Although you will generally pay back anything between £5 and £30 per every £100 borrowed, depending on how long you need the funds for. Payday loans can be a lot cheaper than unauthorised bank charges and long term commitments like credit cards, so they may be a better option that going overdrawn or repaying the minimum on a credit card. Remember they are intended as short term commitments and not long term borrowing.

Why is the APR so high for Payday Lenders?

As mentioned, every Payday lender must display and explain their representative APR. APR is really helpful when used to compare loans that are for a year or longer. But APR is not the best way to compare payday loans because you are usually paying the loan back within 35 days days.

The APR number becomes extremely high because it represents the interest that would be payable if you did actually have that payday loan, at that rate, for a year.

APR is not easy to understand and that's why before applying you need to make sure you know exactly what you are going to pay back on your payday. You can do this by using our short term loan calculator, which gives you the exact figure that you should expect to pay back in total. Most payday loans have a certain charge for every £100 borrowed but others still calculate the repayments using APR.

How do they work?

A payday loan is a small, short term cash loan solution that can provide you with finance to tide you over until you are next paid from your employer. They can be available from high street shops or online, like PiggyBank.

You will be required to fill out an application form, either over the lender’s website or on the phone to a customer service agent. They will credit check you and check the validity of your employment and bank details. It is important that all payday lenders rigorously carry out these checks to ensure that the borrower can afford to pay back the amount without it putting them in financial hardship. This is all part of being a responsible lender. If you are accepted, the money is generally paid out within a couple of days of your application (although some lenders do instant or 24 hour loans. PiggyBank aims to have it to you within one hour of being approved via our faster payment service). You then have the money for the length of the term, unless you wish to pay it back early at no extra charge. Paying back early with PiggyBank means that you actually save money as the interest is added daily. If you pay a PiggyBank loan back early you are only charged interest for the amount of days that you had the loan.

When it comes around to your next payday, the money is usually deducted from your debit card. If you need to, you may be able to apply to defer the loan to your next payday, but remember that this can end up costing you more as interest charges still apply again and you may be charged for deferring the loan. As part of the new FCA regulations actioned in July 2014, you can only roll your loan over twice, so it is important that should you find yourself struggling to pay back your loan on the pre-arranged date that you speak to the lender and explain your circumstances. At PiggyBank we understand that sometimes unforeseen circumstances can result in difficulty when repaying your short term loan on time. If this is the case all you have to do is contact our customer care team and we can work with you to resolve any issues.

Extra charges a payday lender may charge

Transfer fee

This is generally an optional charge that is included if you wish to receive your loan in your bank quicker than the usual transfer time. PiggyBank do not charge you a transfer fee and always pay loans out by faster payment to reach your account as soon as possible, (usually within a couple of minutes of leaving our bank, however this can depend on who you bank with.)

Roll-over costs

This is generally a high fee incurred if you wish to roll-over your loan until next month.

Late payment fees

If you do not make your payment on time a late payment fee may be added onto your loan.

Default fee

This is applicable is you default on your loan and this charge is usually the highest

Early settlement fee

This is applicable if you pay your loan off early, most payday lenders do not charge any extra fees for this, you will just have to pay the interest agreed on the initial loan agreement.

Collections fee

This is applicable if you do not repay your loan and the payday company have to involve a collections company to recoup the debt from you

Cancelling your debit card

If the company finds out you have cancelled your debit card to try and stop them taking payment, they can charge you extra for this

Solicitor fees

Applicable if the payday company have to assign a solicitor to your case if it is going to court.

At PiggyBank we want to be as transparent as possible so we are very open in telling you any fees that may be added to your account. It is important to understand why these fees are in place. The administration fee sets up your loan. This is added to the amount you wish to borrow so will not reduce your loan amount. It allows for the agreement to be drawn up and for us to pay out your money. Other fees are in place to keep your loan active should you roll it over or repay it on a later date than was originally decided. Payday loans are very useful and effective for millions of people all over UK, so we have to add interest to ensure we can keep lending to you and so we have all the necessary processes in place to make sure we are consistently lending responsibly to all of our customers.

Advantages of a payday loan

  • Quick access to cash advances for salaried employees
  • Equal opportunity loan so you can apply for most if you have a poor credit history
  • If you pay them back according to the loan agreement then they can help you rebuild your credit history
  • The application process is very simple
  • It's easy to borrow the money
  • Eligibility criteria is minimal
  • Small amount for short term so you are not in debt for very much and not for long

Disadvantages of a payday loan

  • Really high interest rates
  • High extra charges could be applied
  • The charge per £100 borrowed can sometimes be up to £50
  • Not paying them back can really ruin your credit history and completely destroy it
  • Not repaying a payday loan can leave you broke, stressed out and unhappy
  • They can worsen your debt as they increase your monthly outgoings
  • If you have a good credit history they are a really expensive loan and shouldn't be treated as your first option to obtain credit

Alternatives to payday loans

  • Build up an emergency fund in your savings account
  • Keep an secret credit card hidden for emergency expenses
  • Get a loan from a credit union
  • Get a part time job for extra cash
  • Negotiate a payment plan with your current lenders
  • Talk to your creditor about extending your due date
  • Do some overtime in your current job
  • Ask your employer for an advance on your wages
  • Sell or pawn things you no longer need
  • Look for local emergency hardship programs
  • Borrow from a friend or a family member
  • Try a responsible short term lender

Before you take out a PiggyBank short term loan, you need to ask yourself whether borrowing money is the right thing for you. If you can cut down on your spending or put off buying something until you’ve saved for it, do that. If you are borrowing money to make repayments on other loans and debts, you may be in a vicious circle and it might not be the best thing to do. If you think you need help with your debts, you can contact the Step Change Debt Charity service at www.stepchange.org.

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

Why Choose Us?

  • Direct Lender
  • No Payout Fee
  • No Hidden Costs
  • Fast Online Application
  • Multiple Repayment Options
  • 100% UK Based
  • Fully Authorised by the Financial Conduct Authority
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