Payday loans explained.

Payday Loans have gained popularity in recent times, such loans are also known as High-Cost Short Term  Loans which are available online. Payday loans are typically for amounts between £100 – £1000 over a short term, usually repayable within 1-6 months.

Individuals usually take out Payday loans for unforeseen expenses that arise where their regular income will not be able to cover this expenditure.  Due to recent changes in the economic climate such as working practices with more individuals working zero hour contracts or in the gig economy, more and more people are having to access alternative forms of credit such as Payday loans.

Payday lenders offer slick and fast applications, quick decisions with a quick transfer of funds into your bank account.  Loan repayments are often taken via Continuous Payment Authority (CPA) which is different from taking payments via Direct Debit. Unlike the Direct Debit scheme, CPA payments do not provide guarantees to the borrower where there is a dispute.

Most Payday lenders provide loans at the FCA price cap which is currently set to a daily interest rate of 0.8%, this means you will be charged around 1200% APR for a payday loan which is the maximum legal amount a Payday lender can charge you!

Payday lenders charge the maximum interest rates because they are commercial companies who are looking to make maximum profit and pay out dividends to their shareholders.

Who is Street UK?

Street UK is different to Payday lenders and other High-Cost lenders as we operate on a non-profit basis. As a Social Enterprise we do not have any shareholders and our interest and fees are only designed to cover the costs of providing our services.

At Street UK we make responsible lending decisions to make sure we only lend to individuals who can afford a loan and by providing credit we are not over-indebting an individual.

Our personal loans are available from £200 to £1,000 payable over 1 year on a payment plan that suits your income so you can pay weekly, fortnightly, four-weekly or monthly.

We have provided examples of how Street UK loans compare to Payday lenders and other High-Cost lenders below.


Name of the company Loan amount Term APR Monthly repayment Total Cost of Credit payable
Street UK* £300 6 Months 180% APR £52.53 £352.53
Satsuma** £300 6 Months 535% APR £147.60 £442.80
Quick Quid*** £300 6 Months 1294.1% APR £172 £456


A £300 loan over 3 months with Street UK can save you over £90, for someone who regularly obtains Payday loans this saving could add up over a period.


*Street UK Total Cost of Credit includes 5% administration fee. See for further information.

**Information taken from and is correct as of 10/05/2019.

***Monthly payment average, actual repayments are £72 for first two months followed by final payment of £372. Information taken from and is correct as of 10/05/2019.