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FLEXIBLE ALTERNATIVE TO A TRADITIONAL PAYDAY LOAN

Repay monthly on your pay date

MYJAR
Rated 9.4/10 by more than 2000 customers

Show example

You can borrow UP TO £[[product.limits.upper_limit]]
Rate [[product.interest]]% per day

You can borrow UP TO £[[product.limits.upper_limit]]
Rate [[product.interest]]% per day

REPRESENTATIVE EXAMPLE

Borrow: £300 for 90 days Interest: £144.06 Total to repay: £444.06 Repay in 3 instalments of £148.02 each. Annual interest 274% (variable). Representative 1081% APR. Maximum 1326% APR.

IMPORTANT INFORMATION

Repay early and save money
A late payment charge of £15 is added 3 days after due date
Short term loans may not be suitable for long term borrowing
Loans for over 18's only and are subject to status

What is a payday loan?

Payday loans are typically relatively small loans taken over a short period, generally 1 – 12 months. They can also be referred to as High Cost Short Term Credit loans (HCSTC). The amounts that are generally available range from around £100 and can go up to £1,000, although some lenders do offer larger sums. Most payday loan customers use this form of lending to cover unexpected or emergency bills, knowing that they will be able to pay them back once their salary goes into their bank account.

Why choose a payday loan over other types of finance like credit cards or overdrafts?

There are several reasons why people might choose to take out a payday loan instead of borrowing in another way.

Very often loans can be arranged quickly, conveniently on-line and the money, if approved can be available in the customer’s bank account in just a few minutes.

Some people like to use payday loans, because they are easy to understand and the costs are absolutely clear up front. With payday loans, there should be no surprise costs.

No matter what type of finance you choose, the main thing is to make sure that you understand the key terms and conditions and what is expected from you. Lenders should put the key information clearly in writing and allow you time to consider the loan offer. It is always worth shopping around to get the best loan you can. This might include the repayment term and the amount you can borrow as well as the interest rate and subsequent charges if your circumstances change and you find yourself unable to repay.

How much does a payday loan cost?

Payday loans can look expensive with APR rates often at more than 1,000%. However, because the loan is taken for quite a short period, the actual amount of interest in money terms can be quite small. Since the beginning of 2015, UK regulation capped the amount that lenders can charge to 0.8% per day. That means that if you borrow £100 for 30 days, it cannot cost you more than £24. Although the cost is capped at 0.80p per day for every £100 borrowed, some lenders charge less than this.

Another element of the cost cap is that, even if a loan is paid late, the total cost can never be more than 100% of the amount borrowed. So in our example of a £100 loan, the total amount that can be paid back will never be greater than £200.

What if I need to borrow for longer than a month?

Although payday loans were historically for very short periods with a single payment at the end, short-term loans are now being offered for up to 12 months. In these cases, the loan is paid back, usually by monthly instalments with the interest and loan capital spread out evenly across the term.

Can I get a payday loan even if I have a bad credit rating?

Each lender uses different criteria to decide who to lend to and an individual’s credit rating will be one factor taken into account. However, the most important thing to consider when thinking about taking any sort of finance is whether you can pay it back on time without having to resort to other borrowing or getting into financial difficulty. If you already have a poor track record and you then take on more debt which you cannot afford to repay, that will just make the situation worse. It is never a good idea to borrow money to pay your debts.

Lenders are required to check that each loan they approve is affordable and that the customer is creditworthy. In most cases they will do a search at a credit reference agency and they might also ask to see evidence of your pay or a banks statement to help them decide whether to lend.

Where is it possible to get help if I am worried about my situation?

If you are in financial difficulty, rather than borrowing more money it is better to get good quality help. If you have a loan outstanding, always contact your lender. It is in their interests to help you and they will usually be prepared to agree a repayment plan with you that you can afford.

There are also plenty of sources of free debt advice which can be accessed face to face, by phone and on-line. Advisers work with you to understand your situation. They will identify what your priority needs are, such as keeping a roof over your head, feeding the family, being able to pay for transport to get to work and they will make sure that part of your income is protected. They will then work with your creditors to pay them only what you can afford and based upon the amount that each creditor is owed.

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

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