Payday Loans

When faced with an urgent expense, a payday loan could provide a financial bridge between one wage-day and the next.
However, a payday loan could be an expensive option, so it’s important to do your research and explore all your choices.

Little Loans is a credit broker. Please note that none of the lenders on the Little Loans panel offer payday loans. Instead, our partners could provide a payday loan alternative in the form of a short-term loan. A short-term loan can be repaid across a term of 3 to 60 months, depending on how much money you apply to borrow.

What is a payday loan?

As the name suggests, a payday loan is an amount of money borrowed from a lender in the event of an unexpected expense, intended to tide you over between one payday and the next. This type of borrowing is usually repaid in full within a month and your repayment will include interest.

Does Little Loans offer payday loans?

While Little Loans does not work with any lenders of payday loans, we’re committed to helping people with a range of credit scores who need access to money to fund an emergency cost.

We are a credit broker with access to a range of specialist providers that offer short-term, personal loans between £100 and £10,000, with repayment terms ranging from 3 to 60 months.
Our free eligibility checker makes it possible to check your chance of being approved for a loan before you apply.

Who is a payday loan suitable for?

Payday loans are typically intended for those with a regular income but who have a short-term need for emergency funds due to an unexpected, one-off expense.
They are not suitable for dealing with longer-term financial challenges.

You’ll need to carry out thorough research on your chosen payday loan product and lender before you decide whether to apply.

What can I use a payday loan for?

A payday loan is usually taken out to fund a financial crisis that simply cannot wait, such as a vet’s bill or car repairs to get your vehicle back on the road.
You should remember that a payday loan is an expensive way to borrow and is generally intended for an urgent, short-term money issue. Using a payday loan for another purpose could result in problems such as a spiral of debt, a decline to your credit score, and increased financial stress.

How quickly could I get the money?

Because the money is intended for emergency use, payday loan providers could send the funds to your bank account the same day as your application is accepted. Exact timescales vary between providers, and the time it takes for the money to appear in your account will depend on your bank’s policies and procedures.
However, this doesn't just apply to payday loans. If approved for a short-term loan, some providers could send the money to you quickly. Several of the lenders on the Little Loans panel are able to send your money the same day you’re approved, although again, it’s important to be mindful of your bank’s individual policies and procedures.

Can I apply for a payday loan?

Although each lender has its own criteria, the following requirements generally apply across providers for payday loans and other types of short-term loans.
You must:

• Be over the age of 18;
• Be a UK resident;
• Have a UK bank account and valid debit card; and
• Have a regular source of income paid into your bank account.

You’re welcome to search for a short-term loan using the Little Loans credit broking service if you match the above criteria.

Do I need a guarantor?

A guarantor loan is where someone else agrees to make the repayments for you if you cannot. Not all payday loan providers require a guarantor.
There are other specialist providers who offer guarantor loans, and these could be an alternative product if you are not eligible for an unsecured loan.

Little Loans does not currently work with any guarantor loan providers.

How long does it take to apply?

Many payday loans can be applied for online, which could be convenient if you need money in a hurry and have decided, after careful research, that this is a suitable option for you.

With Little Loans, you can search for a short-term loan 24 hours a day, 7 days a week, from the comfort of your own home or even on the train to work. Our online form takes just 5 minutes to complete, and we can show you your eligibility in just 60 seconds.

How to apply for a payday loan with a direct lender

While every lender is different, you could expect a payday loan application process to look a little like this:

1. Tell the lender how much money you need to borrow and fill out an application form.

2. The lender will complete a creditworthiness assessment, which will include either a hard search or Open Banking.

3. If you pass the creditworthiness checks and you’re happy with your loan offer, the lender will let you know when your money will be sent.

Are there any hidden fees?

Little Loans does not charge a fee for our service as a credit broker.

Lenders authorised and regulated by the Financial Conduct Authority (FCA) must be transparent about the fees they charge. The FCA also places limits on how much interest payday lenders can charge. You will not be charged more than 0.8% of the amount borrowed per day and default fees are capped at £15. In total, lenders cannot charge more than 100% of the amount you borrow.

What are the repayment terms?

Payday loans typically need to be repaid in full within a month.
If you’re hoping to spread the cost of borrowing beyond a month-long period, you might wish to consider a short-term loan as a payday loan alternative.

Can I apply for a payday loan if I have bad credit?

It might be possible for you to be eligible for a payday loan with bad credit, although again, this may not be your only option when it comes to borrowing money.
Little Loans is proud to work with lenders of short-term loans who are willing to consider applications from people with bad credit history.

Please be aware that if you apply for a bad credit loan, you could be presented with a higher interest rate. It’s important to understand how this will impact the cost of your borrowing. The greater the interest, the more expensive the loan and the higher your monthly repayments will be.

Could I get a payday loan if I have no credit history at all?

If you have no credit history, known as a ‘thin’ credit file, it can be difficult for lenders to assess your application.
The good news is that there are a number of UK-based lenders, including a handful on the Little Loans panel, who specialise in short-term loans for people with thin credit files.

Could a payday loan negatively affect my credit rating?

As with other types of credit, a loan has the potential to negatively impact your credit score.

You should be mindful of how many loans you apply for. Each time you apply for credit directly with a lender, a creditworthiness assessment will be completed. This will include a hard search or Open Banking. Each time a hard search is carried out, it will leave a visible mark on your credit file for up to 12 months. Multiple hard searches in a short period of time will harm your credit score.

If you decide to take out a loan and you make a late repayment or miss one altogether, your credit score will decline.
On the other side of the coin, making your loan repayments on time could help to improve your credit score, although additional factors will also have an impact and it’s important to keep on top of all current credit commitments and bills.

IMPORTANT

Whether using a credit broker or lender to search and apply for any type of loan, you should make sure that the company you’re dealing with appears on the FCA register.
Companies operating outside of FCA guidelines will not offer you the same level of protection as authorised and regulated lenders. This means that if something goes wrong, you will not be protected.

Six reasons to choose Little Loans for your payday loan alternative

1. We work with a panel of over 30 trusted and responsible lenders who offer short-term loans up to £10,000.

2. Little Loans, and all the lenders we work with, is authorised and regulated by the FCA.

3. As of March 2025, Little Loans is rated ‘excellent’ on Feefo, with an average rating of 4.5/5.

4. Our secure online form should take no longer than five minutes to complete.

5. All quotes are no-obligation, and we don’t charge any fees.

6. We pride ourselves on our excellent customer service. Our friendly Customer Care team are available to answer your questions Monday to Friday, between the hours of 9am and 5pm (excluding bank holidays).

What happens if I can’t repay my loan?

If you don’t make your loan repayments on time and in full each month, your credit score will be damaged, and you may be charged a late fee by your lender.
It’s therefore important to borrow responsibly. You should never apply to borrow more money than you need or can afford to repay.

Sometimes, our financial situation can change due to reasons out of our control, such as a redundancy.
If you’ve taken out a loan and are concerned that you’ll be unable to meet your repayments, the best thing to do is to contact your lender at the earliest opportunity.

You can access free financial advice and support through the following charities and organisations: StepChange, MoneyHelper, Citizens Advice, and National Debtline.