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Implications Of Non-Repayment For Payday Loans Online

When you agree to the terms and conditions of a payday loan, you agree with the lender to repay on a specific date. However, we appreciate that financial circumstances can change and you may not be able to repay your loan on time. Therefore, before you apply, it is important to know the risks and consequences if you fail to meet repayment. Below we list the main outcomes if you are unable to pay:

Default fees and charges for missing repayment

A payday lender will charge you a default fee for each repayment that you fail to make. As per the new price cap, the maximum default fee that lenders can charge is £15 per repayment or instalment. In addition, the daily interest (capped at 0.8%) continues to be added on your loan amount until it is frozen after 60 days. This demonstrates that the amount repayable are unable to meet repayment on time.

Can I pay back in smaller amounts?

Yes, usually if you ask the lender to offer you a pay plan or an arrangement, they should be able to offer you forbearance provided that you don’t do this repeatedly. For example, if your repayment amount is £100, a pay plan may involve repaying £20 or £10 a month until the balance is cleared unless you can clear it sooner.

Going into an arrangement or pay plan should not be an easy option to extend your loan. There will still be a default charge issued and it will leave a negative note on your credit file.

Negative Impact to your credit score

By failing to repay your loan on time, the information will be fed back to a Credit Reference Bureau such as Experian. This means that other lenders will know that you missed repayment for a loan so it may be harder to obtain credit and other loans in the future. To repair your credit score, you will need to repay a number of other loans on time to get back to the original position.

Do payday lenders offer rollovers or extensions on their loans?

Yes, some lenders offer top-ups or rollovers in order to extend the length of the loan. However, to roll over the loan means that the interest keeps accumulating so it significantly increases the cost of the loan. With the new price cap ruling, lenders are limited to offering a maximum of two rollovers per loan per customer.

Is a payday loan right for me?

Before you apply for your loan with one of our lenders, it is important to consider how you plan to repay your loan. Payday loans are an expensive form of credit and are intended for emergency expenses. Borrowers should consider how they plan to repay the loan and interest before they apply. High cost short- term loans should not be used to fund luxury or material goods or to pay off other payday loans. For help, go to

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