Payday Loan Debt Help: Your Rights and Options

How payday loans are regulated

Payday loans are a type of high-cost short-term credit. Since 2 January 2015, the Financial Conduct Authority (FCA) has capped what lenders can charge on this kind of loan. The rules are:

• Interest and fees combined cannot be more than 0.8% of the amount borrowed per day.
• Charges for late or missed payments are capped at a fixed £15.
• You can never be asked to pay back more in interest and fees than you originally borrowed. The total cost cap is 100% of the amount borrowed.

If you cannot repay a payday loan

Contact the lender as soon as you know you will struggle. Citizens Advice says a lender should deal with you sympathetically and positively, should offer to freeze interest and charges if you can make payments under a reasonable repayment plan, and should tell you about free, independent debt counselling.

Be careful about rolling a loan over or extending it. Extensions can add cost, and it is worth checking exactly what an extension will cost before agreeing. If a lender pressures you to extend, note how many times it happened and how much you paid each time. That information can help if you decide to complain.

Continuous payment authority

Many payday lenders take repayments using a continuous payment authority, or CPA, which lets them collect money from your debit or card account. Citizens Advice says a lender should explain how a CPA works and tell you in advance that it will take money from your account. You have the right to cancel it.

If money going out of your account is making things worse, you can ask your bank or card provider to cancel the CPA, and tell the lender in writing. Cancelling a CPA does not make the debt disappear, so you still need to deal with what you owe, ideally with advice.

Get free debt advice

A free debt adviser can look at all of your debts, not just the payday loan, and work out an affordable plan. See our list of debt helplines for numbers and hours. In England and Wales, an authorised adviser can also help you apply for Breathing Space, which pauses most creditorHow to Deal with Creditors: Communication and NegotiationPractical advice on communicating with creditors, negotiating affordable repayments, and understanding your rights when dealing with the companies you owe.Read more → action and freezes most interest and charges for 60 days.

Payday loans are usually treated as non-priority debtsPriority and Non-Priority Debts ExplainedLearn which UK debts are priority debts, such as rent, council tax and energy bills, which are non-priority, and why the difference matters.Read more →, so rent, mortgage, council tax and energy come first. Our guide to priority and non-priority debts explains the difference.

When you could complain about a payday lender

You might have a reason to complain if a lender did not follow the rules. Citizens Advice lists reasons that include:

• The lender did not make clear the total cost of repaying the loan
• It did not check your finances to see whether you could afford to repay, such as your income, spending and history
• It did not explain a continuous payment authority properly or your right to cancel it
• It charged more interest and charges than FCA rules allow
• It pressured you to extend the loan, or did not explain the risks or cost of extending
• It did not treat you sympathetically when you struggled, or did not tell you about free debt counselling

How to complain

Start by complaining to the lender, and keep copies of everything. Citizens Advice suggests a template letter. If you are not satisfied with the response, or the lender does not reply within 8 weeks, you can take the complaint to the Financial Ombudsman Service (FOS)Financial Ombudsman Service (FOS)The Financial Ombudsman Service is a free, independent service that resolves complaints between consumers and financial firms.Read more →. Citizens Advice gives the FOS numbers as 0300 123 9 123 or 0800 023 4567. Complaining is free. The outcome depends on your case, and nothing here is a promise of compensation.

What to have ready before you call

Free advisers can work faster, and give you better advice, if you have your details to hand. You do not need everything in perfect order, and you can still call if you are missing some papers.

• A list of what you owe, who each debt is with and roughly how much, including any letters from collectors
• Your income from all sources, and how often it is paid
• Your main regular outgoings, such as rent or mortgage, council tax, energy, food and travel
• Any court papers, default noticesDefault Notice for Debt: What It Means and How to Respond (UK)Received a default notice? Find out what it means, the 14-day rule for credit agreements, how to put things right and what happens if you do not.Read more → or letters threatening action, with the dates they arrived
• Details of anything you own of value, and any savings

Keep records

Keep every agreement, email, text and statement connected with the loan, including screenshots from the lender's app or website. If you later decide to complain, these records show what you were told, what you paid and when. If you no longer have documents, you can ask the lender for copies of your loan agreement and a statement of your account.

Other things to watch for

If you have missed payments, a lender could take court action. Our guide to county court judgments explains what to do if you receive a claim. If a lender sells your debt, see how to deal with creditors and debt collection in the UK.

Taking out a new loan to repay a payday loan can make things worse. Speak to a free adviser first, and read should you take a loan to pay off debt?. We checked the phone numbers and opening hours in this guide against each organisation's own website on 20 October 2026. Hours change, especially around bank holidays, so check the website before you call.