Why is this important?
Payday loans are short-term loans for small amounts of money. They are available from high street shops and internet sites. Payday loans can be easy to get but interest rates are very high. There may be other ways for you to sort out your short-term money problem so think about the alternatives before you borrow.
If you decide to get a payday loan, shop around and compare the interest and charges before you borrow. Make sure you are clear about what will happen if you can't pay it back.
This page tells you about how you pay back a payday loan, what happens if you can't pay and how to complain about a payday lender.
Payday loan survey
Tell us about your experience of borrowing from a payday lender. You can help Citizens Advice make sure payday lenders behave fairly and responsibly and follow the rules in future. If you have a complaint about a payday lender, you leave your phone number at the end and someone from the Financial Ombudsman Service will call you back to talk to you.
Paying back a payday loan
Usually you'll be given up to a month to pay back the money you borrowed, plus interest.
The most common way to pay back a payday loan is through your bank debit card. When you get the loan you agree to let the lender take the money from your bank account. This is called a continuous payment authority (CPA).
If there isn't enough money in your account to repay the loan on the agreed date, the lender may keep asking your bank for all or part of the money. Charges will be added for late payment.
Stopping the payment
If you cant afford to re pay the loan, you can instruct your bank or card provider to stop the payment being taken. You must do this at least one day before the payment is due.
Other ways to borrow short-term
Pay day loans are an expensive way to help people over temporary problems. They are not suitable for longer term difficulties.
A loan from a credit union is more affordable – check if there's a credit union in your area
If you have a bank account, you may be able to agree an overdraft. But be careful of going overdrawn without permission.
If you're on a low income and need money in an emergency, you may be able to get help from the Social Fund.
Extending a payday loan
If you are having problems paying back the loan the lender may offer you longer to pay. This is known as a loan extension or deferral. Beware of doing this. If you extend the loan you will have to pay more interest and there may be extra fees.
If you are struggling to pay back what you owe or to manage on your money, get advice.
Making a complaint
Most payday loan lenders are supposed to follow a Good Practice Customer Charter. If they don't follow the Charter, you can complain.
You should first contact the lender and try to sort things out.
If you are still not satisfied, you can make a complaint to the Financial Ombudsman Service (FOS). If the lender is a member of a trade association, you can also make a complaint to them.
Struggling with your money
If you have debts or are struggling to manage on your money, you may like to get help with budgeting or dealing with debts.
Other useful information
The Money Advice Service
The Money Advice Service is a free, independent service. Their website (www.moneyadviceservice.org.uk) has lots of useful information about borrowing and managing your money.
Financial Ombudsman Service (FOS)
The Financial Ombudsman's website has useful information on how to make a complaint about payday lenders at: www.financial-ombudsman.org.uk
Payday lenders' trade associations
- the British Cheque & Credit Association (BCCA) at: www.bcca.co.uk
- the Consumer Credit Trade Association (CCTA) at: www.ccta.co.uk
- the Consumer Finance Association (CFA) at: www.cfa-uk.co.uk
- the Finance & Leasing Association (FLA) at: www.lendingcode.org.uk