Payday loans: the real price

Lesson 9 of 12 in our free Borrowing guide: a 5-minute money game with the key points below.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Borrowing is free for everyone.

Questions you'll answer

Mo borrows £200 for 30 days at the maximum 0.8% a day. How much interest is that?

Under the FCA cap, what's the MOST Mo could ever repay in total on that £200 loan (including all interest and fees)?

Asking your employer about an advance on wages you've already earned → Better route. Some employers offer this. Ask HR — it's a normal question.
A second payday loan to repay the first → Trap. The spiral. If one loan is paying off another, get free debt advice now.
Your uni hardship fund → Better route. Often a grant, not a loan.
'Rolling over' the loan for another month → Trap. More interest stacked on top. Total cost cap still applies, but it gets close fast.
Calling a free debt advice charity → Better route. Free, confidential, and they've seen it all before. Zero judgement.