Payday loans v high street loans

payday loans v high street loans

When it comes to loans, there are so many options that it can be overwhelming. But some of these options may not be right for you, and could negatively impact your financial health. A popular loan solution are payday loans, but these have a questionable reputation and for good reason.

High street loans, also known as direct lender loans, are another option. In this blog, we compare payday loans v high street loans to allow you to make the decision that is best for you. You can view a larger list of the loan options which might be available to you here.


Payday loans

Payday loans are short-term loans usually paid back within a month, 3 months, or by the next payday. Their main benefit is a quick injection of money to help deal with bills and other immediate expenses. This short repayment term might seem attractive, as you won’t be dealing with long repayments, but this usually comes with a heavy cost in terms of interest.

Payday loans have received some serious bad press recently. Payday lenders have been criticised by customers and in the press for excessively high-interest rates and hidden charges. Many lenders will also loan to customers who may not be able to afford to pay the money back. This can put people in a precarious financial position.

Payday loans do offer some benefits however and may be suitable for certain situations.


  • Quick money, conveniently sent to your bank account.
  • No need to leave the house, can all be done online.
  • Payday loan lenders are now capped on what they can charge in fees and interest.


  • Cost of repayments: you will often end up paying back far more than with other types of loan.
  • May impact monthly finances: you will have to repay the loan the next time you get paid, which can be difficult and lock you in a cycle of borrowing.
  • Repayments are collected via Continuous Payment Authority (CPA). This is more aggressive than direct debit and means the lender has full access to your bank account to take money – even if you don’t have it. This can mean extra charges in the form of bank overdraft fees.

high street loans

High street loans

High street loans, such as those offered by Street UK, are an alternative to more expensive payday loans. Like payday loans, they are a quick solution to a sudden unexpected outgoing or financial shortfall. Unlike payday loans, however, interest is more reasonable and you can pay it back over a longer period.

Street UK is a not-for-profit social enterprise which means we only charge what we need to cover the cost of providing the loan.


  • A far lower representative APR compared to payday loans (180% from Street UK compared to 568% from Sunny and 1333% from Lending Stream).
  • The money can be in your bank within 24 hours, with a more personalised repayment plan based on your circumstances.
  • Payments via direct debit as opposed CPA. You can be confident that payments are taken care of without worrying about falling into your overdraft.
  • Authorised by the FCA (Financial Credit Authority). We undertake affordability assessments and ensure all customers won’t be negatively impacted by a direct loan.


  • Interest rates are higher than you might find with bank or credit card loans, however high street loans are still a better option for those with a poor credit history.
  • You have to leave the house and visit one of our friendly branches to finish your application. You can still start your application online, however. Please note: due to COVID-19 our branches are currently closed and we are only accepting online applications. We can still offer you a loan but please allow up to three working days for us to process your application.


Payday loans v high street loans

When in a financial jam people often resort to payday loans because they feel they have no other option. High street loans can be a better solution for your financial health over time. If you are thinking ‘should I get a payday loan?’ it might benefit you to look at the alternatives.

Why not fill out our online application via the link below and see if a direct loan from Street UK is suitable for you? We also offer a range of budgeting advice and our advisors are always happy to help where they can, just get in touch.

Would you like to apply for a Street UK Loan?

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