A payday loan is a short-term loan which is usually paid back on the borrower's next pay date. Payday loans offer people quick access to cash and often used by those people who are struggling to make their money last to the end of the month, as you can have your payday loan in your account within 15 minutes with some companies.

The amount you receive can range from as little as £50 to well over £1,000, however, you will always be required to pay the full sum of money back by your next payday, which makes it a difficult debt to manage.

How do they work?


Usually you'll be given up to a month to pay back the money you borrowed, plus interest. In some cases the term of the loan can be longer. They should never be used for long term borrowing, however, more often than not, we see them transform from a quick fix solution into a long term problem.

Typically, lenders will take your bank card details for your loan to be transferred immediately. What many people aren’t aware of is this also gives them the ability to take the loan repayment automatically on the due date. Therefore, to avoid extra interest and fees from your bank, it is your responsibility to have the full amount you owe available in your account on the due date.

Why are the pitfalls with Payday Loans?

One of the main reasons Payday Loans can be very expensive due to the high interest rates on these loans. Not only that but failing to repay the loan within the agreed upon time frame would also trigger penalties and fees which quickly overwhelm many borrowers.

Payday loan lenders also have direct access to your bank account, meaning they can make deductions from your account. This may be to cover fees you didn’t realise you owed, which were hidden in the fine print.


Payday loans can be an effective short term solution for unexpected expenses. They are useful for those who are in the right situation to benefit from them. More often, however, payday loans are being used as a long-term debt solution- which can have serious consequences.

Debt Solutions

To get your long-term debts under control, there are options available to help you pay back your debts in manageable instalments:

IVA (Individual Voluntary Arrangements)

This is a formal agreement between you and your creditors whereby you repay a percentage of your debt in affordable, monthly payments, usually over a period of five years.

DMP (Debt Management Plans)

This is an informal agreement between you and your creditors. You will agree to repay your debt in reduced, more affordable payments at the most convenient time for you.

If you are struggling to pay a payday loan or have difficulty paying outstanding debts, please call Aperture, we offer free debt advice. You can contact us free on 0333 939 7919.

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