Compare text loans

Text loans are a new spin on payday loans, making it quicker and easier than ever for people to borrow small amounts over short periods. But, like payday loans, they're an expensive way to borrow.

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Payday loans have helped thousands of people out of a tight financial spot, but they also come with eye-wateringly high rates of up to 0.8% per day. To put that in perspective, if you were to borrow £200 for four weeks at a daily rate of 0.8%, you’d pay just under £45 in interest.

Text loans make it easier than ever to get your hands on these high-cost, short-term loans, but debt charities argue this could lead to irresponsible decisions. Is there such thing as a loan that’s too easy to get?

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

What is a text loan?

A text loan is essentially a payday loan that you can apply for via a text message. You just send one message to your lender via a smartphone app, and it can approve your loan almost instantly, even if you have a poor credit rating. The first time you apply you’ll need to go through a similar application process to a standard payday loan, but thereafter you’ll be able to use the text service. And certain lenders go a step further and offer an automatic “top-up” for your bank account, if your balance drops below a certain point that you set.

Once you’re up and running, you could be approved for a payday loan literally within seconds. As more lenders adopt text loans, they’re starting to become the backbone of the payday lending industry.

Should I take out a text loan?

Payday loans can be useful for those who need speedy access to cash, but they’re extremely expensive, to the point where most other forms of finance are likely to prove more cost-effective. They aren’t suitable for sustained borrowing. As such, it’s always worth considering the other options – credit cards and personal loans, for example – first.

Some debt charities believe that making it so easy to apply for a payday loan through your mobile phone could lead to more people making careless financial decisions. It’s also been claimed that text loans could make people more likely to use payday loans multiple times, even though this is a terrible financial strategy.

The counter-argument goes that customers bear responsibility for judging whether they should be taking out text loans, and providers are just making their product as accessible as possible.

Which lenders offer a text loan service?

Among the lenders who offer text loans are:

  • PiggyBank
  • MobileQuid
  • Textloans24h
  • Toptextloans
  • Pounds To Pocket
  • Cashfloat
  • New Horizons

These are just some examples – the list is growing all the time.

Compare lenders

Table: promoted deals, sorted by total payable
We’ve listed lenders here, but not all these lenders offer a text loan service. While some do (such as PiggyBank), here at finder we strongly feel that whenever borrowers need any form of finance, they should compare lenders to seek out the best rate available. Shopping around almost always brings down the overall cost of borrowing, and it only takes a moment.

How much do you need to borrow?


How long do you need to borrow for?


Name Product Available amounts Monthly repayment Total payable
Lending Stream Instalment Loan
£50 to £1,500
Representative example: Borrow £200 for 6 months at a rate of 292% p.a. (fixed). Representative 1,333% APR and total payable £386.61 in 6 monthly payments of £64.44.
Savvy.co.uk Personal Loan
£300 to £3,000
Representative example: Borrow £1,000 for 12 months at a rate of 152.33% p.a. (fixed). Representative 352.7% APR and total payable £1,999.92 in 12 monthly payments of £166.66.
Sunny Loan
£100 to £2,500
Representative example: Borrow £100 for 8 months at a rate of 204% p.a. (fixed). Representative APR 568% and total payable £199.33 in 8 monthly payments of £19.93. You can repay this loan early.
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Compare up to 4 providers

Please note: You should always refer to your loan agreement for exact repayment amounts as they may vary from our results.

Are there alternative options to text loans?

  • Credit-builder credit cards. These are credit cards designed for people with a low credit score. The rates are far higher than for traditional credit cards, but are still typically far superior to text loans.
  • Overdraft. If you’re in a position where you’re constantly needing a financial loan to make it to the end of the month, try negotiating a better overdraft on your bank account.
  • Payment plans. If you owe them a lot of money, utility providers will usually let you rearrange your debt into a payment plan to ensure they get what they’re owed. If none of these alternatives are suitable for you, ask for assistance from a professional debt advisor. The Money Advice Service was set up by the UK government to provide guidance to people in situations just like this.

Best of all, if there’s any way you can defer the expenditure, that’s always going to be your cheapest option (don’t use a payday loan to fund a night out, for example!). Real financial emergencies that can’t be put off do crop up, though. You can always get sound and free debt advice from the government’s Money Advice Service.

Dos and don’ts for text loans

Do:

  • Weigh up other options (such as those outlined above) before applying
  • Compare lenders to get the best rate
  • Check you meet the eligibility criteria before applying
  • Put a security lock on your phone so no-one else accesses your text loans app
  • Pay back your loan on time

Don’t:

  • Get into a habit of regularly taking out payday loans
  • Borrow money for longer than you need to
  • Apply for more than you can afford to pay back
  • Use text loans to fund unnecessary purchases

The advancements in technology have made most elements of our lives quicker and easier. This makes it all the more important to ensure you read the terms of a loan before you apply for it. Text loans could be suitable for borrowers who need fast money and have no other options. However, it’s likely that borrowers with a good credit score will have access to more cost-effective loans.

The bottom line

It’s really the lender that wins here. The convenience of text loans makes it much easier for borrowers to slip into the habit of regularly taking out small, expensive loans from the same lender. The trouble is, high-cost short-term credit simply isn’t suitable for sustained borrowing.

In fact, you should only ever take out a payday loan to cover an unexpected financial emergency – and even then, only after considering cheaper alternatives. Using them regularly is a bad idea that’s likely to make it harder for you to improve your financial situation.

If you have decided to take out a payday loan, however, compare a good selection of lenders and take out the loan with the lowest overall cost – regardless of whether or not it comes with a text loan service – while ensuring that the repayments will be affordable.

We compare payday/short-term loans from

Lending Stream Instalment Loan
Savvy.co.uk Personal Loan
Sunny Loan

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.

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