Payday loan
Cards & borrowingA short-term, high-cost loan designed to be repaid quickly.
Overview
Payday loans can be expensive and are best avoided where possible.
They are regulated in the UK, but costs can still be high.
Why it matters
- It can be costly and lead to debt cycles.
- Missed payments can seriously harm your credit profile.
- It affects affordability for other credit.
FAQs
Do payday loans affect my credit score?
Yes. They are credit accounts and are reported to agencies.
Are payday loans the only option for short-term cash?
No. Alternatives include credit unions or budgeting support.
Related terms
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