Interest on payday loans has been cappped at 0.8% a day or 292%
Payday lenders can charge no more than £24 a month for every £100 you borrow
The interest rate that payday lenders can charge has been limited to 0.8% interest a day from January 2015. That works out at 292% interest. Importantly, if you borrow from a payday lender you will never owe more than twice the amount you borrowed.
Loan brokers - why you should avoid them and how you're protected
If you want to find a loan online, what does a loan broker do? And why are regulators cracking down on them?
If you’re after a loan, you might think you’d get access to the pick of the lenders if you use an online broker. But you’d probably be wrong. You’d probably be asked to pay an upfront fee (usually £50 - £75), but there would be no guarantee you’d get a loan. In fact, many people have complained that they’ve had money taken from their accounts by loan brokers they’ve not signed up to.
If you need a short term loan, you're much better off getting one from a credit union than a payday lender.
Credit Unions are not for profit savings and lending institutions run by and for their members. By law they can't charge more than 42.6% APR for a loan (it used to be 26.8%, but they are now allowed to charge more). However many charge far less. What do you need to know if you're thinking of using a credit union?