Small loans cost more for what they are
Small loans carry fixed processing costs and higher risk, so their APRs are high. Even so, the cash cost over a short term can be modest. Always check the total repayable in pounds.
The FCA price cap
For high-cost short-term credit, the FCA caps interest and fees at 0.8% per day of the amount borrowed, caps default fees at £15, and caps the total cost at 100% of the amount borrowed. You will never repay more than double what you borrowed.
Cheaper options to try first
- Credit union loans, often far cheaper for small sums
- An arranged overdraft for a few days
- A payment plan directly with the company you owe
- Budgeting Loans or Budgeting Advances if you receive certain benefits
- Hardship funds from your energy or water supplier
Common questions
Will a small loan help my credit score?
Repaying on time can help, but frequent short-term borrowing can concern mainstream lenders.
Can I borrow less than £250?
We start from £250. For smaller sums, a credit union or your bank is likely to be cheaper.
This guide is general information, not personal financial advice. If you are worried about debt, free help is available from MoneyHelper, StepChange and Citizens Advice.