UK payday lenders began to spring up online back in 2003. Subprime short term lending soon become big business and continual growth lasted for a good decade. A major battle for dominance had played out between 2 American groups. This included Cash America who controlled QuickQuid plus Pounds to Pocket (that merged with On Stride). Then there was DFC Global (was Dollar Financial) who had acquired Payday Express, PaydayUK and The Money Shop. British-based Wonga went on to become the industry powerhouse, but there was a storm brewing ahead when the FCA replaced the OFT as the financial regulator in 2014. The FCA would unleash industry capping in early 2015 with further rulings that pushed many firms over the edge.

They were also trigger-happy with heavy fines that only giant banks can typically manage to soak up. There had been an estimated 200 firms operating, but most of which have closed and others that survived made the switch to provide instalment products where greater profits can be sourced. The most high profile closures were PaydayUK and Wonga. Wonga’s downfall seemed inevitable when their 2015 report highlighted an after tax loss of £76.5 million. In contrast, this was a brand that at their height had surpassed 1 million customers and had been issuing approx 10,137 loans daily. They even had their logo printed on the shirt of 3 football clubs at one time (Blackpool, Hearts and Newcastle). Just to add that several major closures occurred in late 2019 noting QuickQuid and PiggyBank who had previously took the top 2 ranking spots. 247Moneybox and Swift Sterling are also now defunct.

About: Niche

Banks and mainstream lenders are judgemental and aim to minimise the risk of potential default. Those with bad credit and even those with less than perfect scores don’t usually make the grade. This is why there has been a huge market for specialised subprime companies to fill the demand. A low cost solution is credit unions, but they usually require appointments, membership sign-ups and payouts (when successful) are slow. Payday firms in contrast can send rapid same day cash with no faxing or required document requests in many cases. Payouts may even extend across weekends. These products used to be very expensive, generally due to expensive transfer fees. The FCA’s cap has at least corrected this.

Interest and all associated fees can now not surpass 0.8% daily. This translates as £24 for £100 over a full month of 30 days. This is even cheaper than some bank overdraft products. It is usually the case that money borrowed will need to be repaid on the next pay date. Select providers do offer greater flexibility though where you can choose the specific day within the month or there may be X number of months offered where you can spread the cost further and devise more affordable repayments. First time borrowers are typically capped at around £300 with larger sums up to £1000 typically reserved for existing customers who have proven trust.

Notes…

Alexa.com: Comparison listings are sorted by global traffic rankings. Those unranked are sorted alphabetically.

Amounts: Borrowing amounts displayed are complete ranges (across every term available).

Closures: Credio, In-Sync Credit Services, MPP Money, NextCredit, Pixie Loans, Pounds Till Payday, WageDayAdvance & Wonga. More recent: 247Moneybox, PiggyBank, Quick Loans Express, QuickQuid & Swift Sterling. Now brokering only: Peachy.

Examples: £100 costs have been sampled. On occasion £200 could only be selected as this was the starting borrowing amount. With The Money Platform, they only allowed £750 on a monthly term.

Flex: This was marked above for flexible short term loans like Wonga where you can freely pick the repayment day. We specifically marked lenders who enable options between 7 and 30 days. 7 days is the standard starting point. Some exceptions are Cash Asap, Smart-Pig and any line of credit service where you can pick 1 day onwards. SafetyNet and Tappily (same group) require repayments up to when you’re paid, but you can then instantly reloan.

Best Prime Deal

5) Cash Asap: £23.84

Feefo.com (5* Percentage + Exact 5* Counts)

3) Drafty: 92% (9670+)

Prime: Drafty

With the freedom to pick any lender on the page with good credit you’d of course be looking for the best possible deal. You’ll find this with Drafty who charge just £5.40. Drafty’s support team operates 7 days a week and so new applicants should be approved quickly. Once a customer is fully approved, they’ll of course have access to their qualified limit 24/7. A further perk is that a flexible line of credit you can choose a nice short short term repayment date of your choice. The borrowing sums are very high at £3000 (new) and £5000 (future). Finally, this lender has excellent feedback on the Reviews.co.uk and Trustpilot portals.

Subprime: SafetyNet

SafetyNet would be our personal top pick of the bunch. This is a good fit for those seeking payday loans like Wonga (major recent closure). Alike them, you can borrow for just a few days and their tech enables 24/7 payouts (once approved). One important point is that automatic repayments are collected up to when you’re paid and so for longer borrowing you’ll need to login and re-request funds. They also offer overdraft protection that you can freely switch off. You must grant banking access (this is read-only access). They have great customer feedback on Trustpilot and have picked up a major industry award. Their sister-brand Tappily is progressing well, but is facing major competition from LOC rival (Drafty).

Last Update: February 12th, 2020