1 week loans

Your options when you need to borrow for up to 7 days.

Warning: Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk.

Please note: High-cost short-term credit is unsuitable for sustained borrowing over long periods and would be expensive as a means of longer-term borrowing.

You can see your next payday coming up, but you’re short on cash now and in desperate need. A fast 1 week payday loan might seem like it could help you out of a pinch. BUT, aside from being an extremely expensive way of borrowing, most payday lenders have stopped offering this service. In fact, a huge number of payday lenders (we’re looking at you, Wonga, QuickQuid and Co.) have stopped lending altogether – either collapsing under the weight of compensation claims, getting nervous about tightening regulations or being unable to make it profitable.

Let’s be honest: “payday loans” have a toxic reputration, and for good reason. So while plenty of lenders previously offered loans of less than a month, most are choosing to move away from the very shortest-term, payday-style loans.

Right. So what are my options?

First, look at all the alternative options to high-cost short-term credit – chances are there are more than you might think. We’ve listed 15 in our handy guide.

In the guide above, we work through options from family/friends, through overdrafts, to a Universal Credit advance. These are really sensible places to start, and you should exhaust these before even thinking about a high-cost short-term loan.

But if you’ve narrowed down your options and are still considering short-term credit, then there are a few interesting companies like Drafty which grew out of the ashes of payday loans. Drafty (representative 96.2% APR variable) offers a line of credit, so you can aways dip into it and pay for what you borrow, while you borrow it. Crucially, you can borrow for longer though – it’s an easy trap to fall into and it’ll cost you more, so it’s incumbent upon you to pay it off after the week.

As another option, while most payday lenders now offer terms starting at 1 month or longer, most will only charge you interest for the days you borrowed. So you might apply for a 1 month loan and then pay it back after a week. But it’s absolutely crucial to check the lender’s terms before applying, and once again, crucially, remember that if you forget and let it run for longer than a week, it’ll cost you much more in interest, so make sure to avoid that pitfall.

What will a 1-week loan cost?

High-cost short-term credit interest rates are capped by the Financial Conduct Authority (FCA) at 0.8% per day. In other words, if you borrow £100 for a week and pay it back on time, you should never pay more than £5.60 in interest. Borrow £200 for a week and pay it back on time, and you should never pay more than £11.20 in interest.

Only use lenders authorised and regulated by the FCA. You can quickly search the lender you have in mind in the FCA’s register to find out if it’s legit.

When it comes to loans with the shortest terms, most payday lenders have opted to charge the maximum allowed, so you should realistically expect to pay that 0.8% daily rate. If you borrow for longer than the week, that extortionate interest keeps rising, so keep the duration of your loan as short as possible.

Most lenders in this space won’t charge fees unless you’re late making a repayment, but it’s still important to double check. If you are late making a repayment, then you’re likely to incur a fee of up to £15, an you’ll pay more interest because you’re borrowing for longer. You’re also highly likely to damage your credit score – making it harder to get a loan in future.

Genrally, if you can repay your loan early, you may be able to reduce the overall cost.

Am I eligible?

Eligibility criteria differs between lenders, and the majority of payday lenders don’t expect you to have a perfect credit history. You will need to meet some basic requirements, however:

  • Age. You’ll need to be at least 18 years old.
  • Residency. You’ll need to be a UK citizen or permanent resident and provide proof of address
  • Income. Ultimately, you’ll need to be able to afford the loan. You’ll need to show that you receive a regular income, and in some cases may need to meet minimum income requirements.

Commonly, you’ll also be required to have a UK bank account with debit card and a mobile number and email address.

You should only really use these loans for unexpected financial shortfalls, and not for day-to-day or unnecessary expenses.

How does it work?

Online payday lenders generally offer a very streamlined, fast lending experience. From the lender’s website the process will typically follow these steps:

  1. Check you meet the lender’s eligibility criteria and apply online.
  2. The lender runs quick, automated affordability and credit checks and usually gives an instant decision.
  3. If you accept the lender’s formal loan offer, funds are typically transferred within an hour. Depending on the lender, this can take longer if you apply outside of office hours.
  4. The capital and interest will be collected from your account in a single transaction, 7 days later.

In most cases, payday loans and other short term instalment loans are repaid using a continuous payment authority (CPA). That means funds will be automatically taken from your account on the scheduled day. CPA’s differ from direct debits because they give the company being paid the ability to withdraw money from your account whenever they wish, and to take payments of different amounts without consulting you. Some lenders accept payments by other means however, such as direct debit or a manual transfer.

Can I modify my loan after taking it out?

This depends on the lender. In most cases, lenders are perfectly happy for you to repay early, and won’t charge you a penalty. However, some lenders will reduce the overall interest when you repay early while others might not. If repaying ahead of time is a possibility for you, check the lender’s policy. Similarly, some lenders will let you extend your loan, while others won’t.

What are the pros and cons?

Payday loans are a very expensive method of borrowing and should only be considered as a last resort. While they may seem have some attractive features, they may not solve your money problems, and they’re not a good idea for borrowing over longer periods, or for sustained borrowing. The cons outweigh the pros.

Pros

  • You can usually get the money quickly. Some lenders can get the money to you in as little as a few minutes.
  • You can apply with bad credit. Most short term lenders have more lenient eligibility criteria than more mainstream lenders like high-street banks.
  • You can usually repay early. Lenders are allowed to charge you up to 0.8% per day.

…and that’s about it.

Cons

  • Super-high interest rates. Although the FCA has enforced a cap on the rates and fees that payday lenders can charge you, most lenders choose to charge the maximum allowed.
  • Fewer and fewer lenders offer these loans. In the wake of Wonga’s demise, many short term lenders have increased their minimum loan terms.
  • You can fall into a cycle of debt. If you’re searching for a short term loan, chances are you’re already in a financially precarious position. Short term loans may sound like a quick fix, but could fall into a cycle of debt that you’ll find difficult to get out of.
  • Let the loan drag on longer than a week, and costs could skyrocket. Be careful not to borrow for longer than you really need to.
  • Cheaper alternatives exist. Rule these options out first.

Bottom line

Getting a 1 week short term loan can help cover you for unexpected emergencies or special occasions, but with higher-than-average fees, be sure you compare all your options before applying.

Make sure you know exactly how you’re going to repay the loan in 7 days. If you think you may not be able to repay the loan on time, it’s best that you don’t take the loan at all. You could end up paying fees and hurting your credit rating.

Frequently asked questions

Who is most likely to be researching 1-week payday loans?

Finder data suggests that men aged 25-34 are most likely to be researching this topic.

ResponseMale (%)Female (%)
65+3.10%1.29%
55-645.30%2.07%
45-549.04%5.56%
35-4414.21%7.62%
25-3419.38%10.47%
18-2417.18%4.78%
Source: Finder sample of 774 visitors using demographics data from Google Analytics
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

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