Payday and Short-Term Loan Claims
Payday and short-term loans are high-cost forms of credit that can quickly become unaffordable. If you’ve struggled with repayments or been caught in debt spirals, you may be able to claim compensation for unaffordable lending. These lenders must follow strict FCA rules about affordability assessments.
Check your agreements on Recoup, our claim partner’s site
What makes payday loans unaffordable?
- Loans approved when you couldn’t afford repayments from income
- Multiple loans creating unmanageable debt burdens
- Rollovers and extensions creating debt spirals
- Inadequate affordability checks before approval
- Lending that worsened existing financial difficulties
- Failure to consider your full financial circumstances
Common short-term loan problems
- High interest rates making loans impossible to repay
- Insufficient income verification
- Ignoring existing debt problems
- Targeting vulnerable customers
- Aggressive debt collection practices
- Credit file damage from defaults
Types of short-term credit you can claim for
- Payday loans – short-term loans until next payday
- Short-term installment loans – repaid over 2-6 months
- Lines of credit – revolving credit facilities
- Logbook loans – secured against vehicles
- Guarantor loans – backed by third parties
- Pawn shop loans – secured against possessions
How to claim for unaffordable payday loans
- Gather evidence of your financial circumstances when loans were approved
- Submit complaints directly to the lenders involved
- Wait up to 8 weeks for their investigation and response
- Escalate to the Financial Ombudsman Service if needed
- Negotiate settlements or await final decisions
Compensation for unaffordable short-term loans
Successful claims typically result in:
- Refund of all interest and charges paid
- 8% statutory interest on refunded money
- Outstanding balances reduced or written off
- Credit file entries removed or corrected
- Compensation for distress and inconvenience
Major payday and short-term loan providers
Click on any lender below for specific guidance on claiming against them:
Time limits and next steps
Don’t delay making your claim. You generally have six years from when the unaffordable lending occurred, or three years from when you first realised you had grounds to complain.
For detailed guidance, see our guides on how to claim for unaffordable lending, what evidence you need, and how compensation is calculated.
Check If You Could Be Owed Compensation
You may be eligible to complain if a lender gave you credit you couldn’t afford. Start a free check in minutes — no paperwork needed. No win, no fee if you choose to proceed.
