How Much Can You Borrow With a Payday Loan in The UK?

The amount you can borrow through a payday loan in the UK ranges from £50 to £2,500 depending on the lender’s criteria and the borrower’s income and affordability.

Payday loans are used by millions in the UK each year as a way to cover cash shortfalls, typically paying for immediate emergencies and pressing bills with a view to repay the loan back in full within 3-12 months.

The average amount that Britons borrow is around £250-£260 and lenders have to consider various factors when deciding how much someone can borrow. Payday loans carry higher interest rates than other financial products, with the APR often exceeding more than 500% or 800%. Therefore, lenders will often assign a loan amount that the customer should be able to repay without failing into financial difficulty. 

Factors that impact how much you can borrow from a payday loan include:

• Income
• Job status
• Affordability
• Credit score 
• Lender’s criteria
• Repeat customers

What is The Average Payday Loan Amount?

The average payday loan amount in the UK is £250-£260, according to the FCA, with the repayment amount in the region of £413 based on an average duration of 22 days (although today most payday loans are a minimum of 3 months).

What is The Minimum Amount You Can Borrow With a Payday Loan?

The minimum payday loan amount is £50, which is what most lenders start with, although some lenders may start from £100.

What is The Maximum Amount You Can Borrow With a Payday Loan?

Most payday lenders have a maximum loan amount of £1500, although some are willing to offer as much as £2500.

Measure	Amount
Minimum Loan	£50
Maximum Loan	Typically £1,500 (some go to £2,500)
Average Borrowed	£250–£260
Distribution	25% < £100, 50% < £200, 90% < £570

What Determines How Much You Can Borrow From a Payday Loan?

Income

Your income and monthly wages from work are a very important factor when a lender decides how much you can borrow. Typically those with a higher monthly income may be able to borrow higher amounts, however, this has to be considered against any other ongoing expenses, debts and open loans that you may have. 

For instance, those with higher incomes may be more stretched financially if they have other financial commitments including mortgages, rent, car finance, credit card bills and other loans open.

Lenders will typically favour stable forms of income that come from a salaried job and ideally one that you have been at for several months or years. Those that are self-employed may be more restricted because lenders believe their income is more prone to change each month. Some lenders have a limit on the age you can borrow at and only some will consider pensions as a source of income.

Job Status

Being full-time employed is likely to help customers that want to borrow the maximum amounts for a payday loan. This gives lenders the confidence that the borrower has a regular and maximum income and can afford to repay their loan.

If you are part-time employed, this may limit your maximum income and the amount you can borrow may be less.

Other forms of employment such as contractors and self-employed may be limited to how much they can borrow, despite having regular earnings, because some lenders view this income as being less guaranteed.

Most payday lenders will not lend to customers that are unemployed, on benefits or receiving a pension – although this may be considered by some.

Affordability (current debt levels)

A lender will look very carefully at your affordability when deciding how much you can borrow – and this matches up the amount you wish to borrow with what you can afford.

The loans provider may decide to adjust or change the amount you have requested, based on other financial obligations and bills that you have.

The lender might consider your existing debt, taking information from your credit report, when making this decision. Other factors include bills, credit cards, other loans, mobile phone bills, rent and more.

Credit Score

Payday lenders will always run a credit check to better understand your financial history and position. Those with a good or fair credit score may be more likely to access the maximum borrowing amounts of £500, £1,000 or £1,500 loans. Those with bad credit scores may be less likely to be approved or access the loan amounts they require. In some cases, the lender may adjust your loan amount based on a credit check.

Lender’s Criteria

Every lender has their own criteria and some providers may be more generous than others when it comes to accessing higher loan amounts.

For instance, one lender may only offer you £300, but another may offer you £400, despite no changes in your circumstances.

UK lenders will have different risk appetites and funding lines and this could influence the amount they are willing to lend to you.

Repeat Customers

Repeat borrowers may be able to borrow higher amounts, because they have proved to the lender that they can repay their loans on time. This may allow customers to borrow the higher amounts of £1,000 or £1,500, only once they have already paid lower amounts on time beforehand.

Again, responsible lenders must check the customer’s income, job status and affordability when offering higher amounts and must also ensure that the customer is not borrowing too repeatedly and too often. Fundamentally, the lender needs to make sure that the customer’s financial circumstances are getting better, not worse.

How Can I Maximise The Amount I Want To Borrow From a Payday Loan?

To maximise the amount that you are looking to borrow, certainly having a good credit score will always be favoured by lenders. There are ways to check your credit report for just £2 and use monitoring services to check your credit score’s progress.

There are several ways to improve your credit score and to continuously do so, including closing any loans or credit cards that you do not need, joining the electoral register or using credit builder products.

Overall, this will reduce your debt-to-loan ratio, which will make you more attractive as a borrower and help you access higher amounts.

What if The Lender Doesn’t Let Me Borrow The Requested Amount?

If the lender does not offer you the requested amount, they may offer you a lower or adjusted amount based on your level of risk.

You are able to write to the lender and ask why they decided to offer you less – or you can always consider alternative lenders.

Importantly, the lender might have offered you a lower amount for a good reason and to avoid giving you a loan that puts you into financial difficulty. 

It is common for borrowers to look elsewhere to top up the remaining amount, but this should be approached with caution. Payday loans carry higher interest rates than most financial products and taking on multiple loans or higher amounts can be risky. 

It is always important to consider all alternatives including borrowing from family and friends, 0% credit cards and local credit unions.