0 £0.00
This item was added to your basket

Dear visitor,
You are viewing 1 of your 1 free articles

We’ve made wider, important changes to our print and online content to enhance the value of exclusive, insightful, discerning content we create every day. Support valuable editorial content by becoming a member of our Credit Club - register for free or choose a paid plan.

Register now or Login

FCA: Number of high-cost short-term loans up, but costs stable

The Financial Conduct Authority (FCA) has revealed that the number of high-cost short-term credit loans is on the rise, but a price cap has helped keep borrowing costs down.

Borrowers repaid more than 165 percent of the cost of their original loans, the regulator’s analysis shows. The figures, covering the period between July 2017 and June last year, showed that over 5.4 million loans were made in that time with £1.3bn borrowed and £2.1bn repaid in total.


The demise of Wonga, which collapsed into administration in September last year, is not taken into account in the figures, which show that lending volumes had been on the rise since 2016 – but were still much lower than in 2013. The FCA estimats that in 2013, before the sector was regulated, the number of high-cost, short-term loans stood at around 10 million per year.


Borrowers were predominantly young, with 37 percent of payday loan borrowers and 29 percent of short-term instalment borrowers aged between 25 and 34. More than half of all high-cost short-term borrowers are either tenants (37 percent) or living with their parents (26 percent).


“While the price cap was a good move from the FCA, problems in the high cost short term credit market are far from over,” said Richard Lane, director of external affairs at StepChange Debt Charity. “The FCA figures show payday lending rising again, and financially stretched young people are still most likely to resort to high cost credit – which matches what we see among our clients.


“All too often this type of credit is what people turn to get by when they are already struggling to meet their commitment.”



Lowell chief executive James Cornell to step down

Lowell chief executive James Cornell to step down

BrightHouse appoints Thomas Cook’s Mooney as chief executive

BrightHouse appoints Thomas Cook’s Mooney as chief executive

Court orders tribunal to reconsider £14bn Mastercard class action case

Court orders tribunal to reconsider £14bn Mastercard class action case

Upcoming events

Credit Awards 2019

Car Finance Conference

Car Finance Awards

Household Credit Conference

Credit Strategy
LinkedIn page

Did you find our website useful?

Thank you for your input

Thank you for your feedback

creditstrategy.co.uk – an online news and information service for the UK’s commercial and consumer credit industry. creditstrategy.co.uk is published by Shard Financial Media Limited, registered in England & Wales as 5481132, Axe & Bottle Court, 70 Newcomen St, London, SE1 1YT. All rights reserved. Credit Strategy is committed to diversity in the workplace.
@ Copyright Shard Media Group