What is a high cost short term loan

Often called Cash advance / Payday advance / Wage advance / Salary advance

They are high-cost loan products where

  • The APR is equal to or exceeds 100%
  • The credit is provided for up to 12 months
  • See the FCA definition

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What is the purpose of this sort of loan?

To provide customers with a poor credit history access to quick borrowing for a short period of time.

  • This can be useful for an emergency or unexpected bill, but only if the debt is affordable.
  • Before considering this type of borrowing, customers should carefully work out their budget and determine if they have spare funds to put towards the loan repayments.

See the Citizens Advice Bureau’s Budget  Planner to help you work this out.

  • As the APRs are over 100%, if the loans are not paid back on time, they can get very expensive and this is where debt problems can start.

Why High-Cost Short Term (HCST) loans?

Whilst we work with guarantor lenders, for customers who are unable to find a guarantor, we do also have HCST lenders who can provide alternative  loan options:

  • £100 – £1,000 loan amounts
  • Repaid in installments on your next pay date, within 3 – 12 months of the loan being paid into your bank account
  • APRs are typically between 100 – 1,500%

Are your HCST lenders authorised?

All the lenders we work with are FCA authorised and can be found on the Financial Services Register.

We do not work with anyone who

  • Fails to comply with FCA regulation
  • Does not continually provide evidence that they treat customers fairly through great customer service and being a responsible lender

What to consider with a HCST loan?

  • Can you afford the repayment conditions, or find an affordable alternative?
  • To be affordable the loan will need to be paid back quickly; can you make that commitment?

What HCST loans do you do?

We do a range of HCST to give people an alternative option if they cannot get themselves a guarantor 👍

  • To see our HCST or ‘no guarantor loans’ – click here

Please note that these are typically more expensive than our guarantor loans, but if you cannot find a guarantor, provide an alternative option.

Find out what you could borrow and the costs


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