The market today
Do payday loans still exist in the UK?
What changed after 2014, why the brands vanished, and what the product looks like now.
Written by the UKPayday editorial team
Updated 18 August 2026
10 min read
The short version
- Payday loans are legal and still available in the UK.
- FCA regulation arrived in 2014 and the price cap in 2015.
- Many are now repaid in instalments rather than one payment.
- A smaller, mostly online market — not a ban.
Yes, payday loans still exist in the UK.
They are legal, regulated credit products offered by authorised lenders. However, today's payday loan market looks different from the market many people remember from television adverts and high street shops.
Several well known payday brands have disappeared. Lending rules are stricter, costs are capped and many products are now repaid through instalments rather than one large payment on the borrower's next payday.
The name has changed more than the basic idea. You may now see these products described as short term loans, emergency loans, small loans or high cost credit.
The original payday loan
The traditional payday loan was simple. Someone borrowed a relatively small amount and agreed to repay the full balance, with interest, when their next wage arrived.
This could create a large repayment shock. If the borrower could not pay, the loan might be extended or replaced with further borrowing. The additional interest and charges could cause the balance to grow.
Payday lending expanded rapidly during the years following the financial crisis. Online applications made the process quicker and large advertising campaigns made the product widely recognised.
Concerns grew about affordability checks, repeat lending, collection practices and the cost of borrowing. Many customers found themselves taking new loans soon after repaying previous ones.
That market has not continued unchanged.
Regulation changed in 2014
The Financial Conduct Authority took over the regulation of consumer credit in April 2014.
Payday lenders operating in the UK were required to meet FCA standards. These included rules covering creditworthiness, affordability, advertising, repeat lending and the collection of payments.
Lenders could no longer treat the ability to collect money as proof that a loan was affordable. They had to consider whether the customer could make the repayment without borrowing again, missing important commitments or experiencing serious financial difficulty.
Rules also restricted the number of times a high cost short term loan could be extended and the number of unsuccessful attempts a lender could make to collect payment using a continuous payment authority.
Firms that could not meet the required standards left the market or were refused permission to continue.
The price cap arrived in 2015
A price cap for high cost short term credit came into force in January 2015.
The cap contains three main protections.
This means lender charges covered by the cap should not require a customer to pay more than twice the amount borrowed.
The FCA explains the payday loan price cap and the effect of its wider reforms.
These limits remain part of the regulated market. They reduce the potential cost but do not make payday loans inexpensive.
Modern payday loans may use instalments
Many current short term lenders allow customers to repay over several months.
An instalment structure can make individual payments smaller, but a longer term can mean paying interest for more time. The borrower must compare the total amount repayable rather than assuming that a smaller monthly payment represents a cheaper loan.
A product does not stop being high cost credit simply because it uses monthly instalments or avoids the word payday.
The FCA definition of high cost short term credit generally covers certain unsecured loans with an APR of at least 100 per cent that are due to be repaid within twelve months. There are exclusions, so not every short loan falls within the definition. The formal wording appears in the FCA Handbook definition.
Why do some people think payday loans were banned?
Payday loans were not banned.
The misunderstanding is understandable because several prominent lenders stopped trading. Some entered administration after facing large numbers of customer complaints and potential redress costs. Other firms changed their products, names or advertising.
Payday loan shops also became less visible as the market moved further online.
The result is a smaller and less obvious market, not a complete ban.
The FCA continues to regulate high cost short term credit and maintains information about the sector. Its market page was updated in December 2025, confirming that this remains a recognised part of the UK consumer credit market. You can view the FCA lending data page.
Legal does not mean suitable for everyone
A regulated payday loan can still be expensive and unsuitable.
Regulation creates minimum standards and protections. It does not mean the FCA recommends the product or approves individual loans.
The lender must make its own decision about an application. Approval is not guaranteed, even when an applicant has used that lender before.
MoneyHelper describes payday loans as an expensive way to borrow, particularly when repayment cannot be made on time and in full. Its current payday loan guide recommends checking alternatives and understanding the complete cost.
Short term credit is particularly risky when it is used to pay other debt, cover regular household bills or replace income that is not expected to return.
How to identify a legitimate lender
Every legal payday lender serving UK customers must hold the relevant FCA permission.
Search for the firm using the FCA Firm Checker. Check the company's legal name, trading names, website and contact details.
Do not rely on a registration number displayed on a website. Scam operators can copy the details of an authorised company while using different phone numbers or web addresses.
A genuine lender should provide clear information about the APR, payment schedule, total amount repayable and consequences of missing a payment. It should not guarantee acceptance or claim that no affordability assessment is needed.
Avoid any company asking you to send money before releasing a loan. Never provide your card PIN or online banking password.
Our guide to Do any payday lenders accept everyone? covers acceptance claims in more detail.
Lenders and brokers are different
A lender provides the money, sets the agreement and collects repayments.
A credit broker searches for possible lenders or passes an application to participating firms. The broker does not make the final lending decision unless it is also separately acting as a lender.
UKPayday is a credit broker, not a lender. We search a panel of participating lenders and brokers rather than the whole market. We cannot guarantee an offer or control the terms a lender may provide.
If you receive an offer after using a broker, check which company is providing the credit before accepting it.
The payday loan survived, but the rules changed
Payday loans remain available in the UK. What disappeared was much of the lightly controlled market that existed before FCA regulation and the price cap.
The modern version is more likely to be offered online, described as a short term instalment loan and repaid over several scheduled dates.
It is still high cost borrowing. Check alternatives, confirm the lender is authorised and make sure every payment fits after essential household costs. Our guide to what payday loans are and how they work follows the full journey.
Warning: Late repayment can cause you serious money problems. For help, go to MoneyHelper.
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