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When it comes to short term instalment or payday loans, there may be charges that apply. We’ve highlighted a few below.


Some loans come with additional fees and charges, which you should be told about upfront. The Financial Conduct Authority (FCA) put regulations in place to ensure that all responsible lenders explicitly advise of any charges that may be due, before you sign the loan agreement.

There are a few common types of charges that can be applied to a loan. If you’re unsure whether you’d need to pay such fees, you can speak to your lender about whether any charges apply. We’ve outlined the most common charges below:

Application/Processing Charge

Some lenders may charge you a fee once your application has been approved, to cover any administration costs. These charges tend to be more common with larger loans, such as mortgages - you almost certainly won’t be charged such a fee with a short term loan.

Early Payment Fee

Early payment charges are another type of fee that is more applicable to long term and secured loans like mortgages. Many mortgage lenders will charge you a fee if you settle the loan early - this is usually a percentage of the outstanding mortgage balance, from around 1% to 5%.

Late Payment Charge

Quite a few lenders will charge you a fee should you miss your due repayment, though these charges won’t necessarily be applied straight away. Some lenders will offer a grace period, to allow you time to make the payment. It’s also important to note that generally, a late payment penalty will only be applied once in the course of your loan.

Broker Fees

Many financial brokers charge a fee for using their services - this can be a flat rate fee, or a percentage of the loan value. However, this is not something that you need to worry about should you apply with My Financial Broker - we never charge our customers a fee, as we instead work on a commission basis with our lenders. You can use our services for free!

Of course there are also a number of other things to consider when taking out a loan. While some lenders charge a fee, they may offer lower interest rates for instance, so it may cost you less overall to take out a loan with them. If you’re looking into short term credit options, it may be a good idea to go through the advantages and disadvantages below, to see if borrowing is the best option for you.

How It Works


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You don’t need to have a perfect credit history to be eligible

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Paying early or on time can help build your credit footprint

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As the loan is short term, you will not be making long term repayments

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Simple, short application form

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Quick access to funds in an emergency


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Interest rates are higher than more conventional lenders

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For those with a good credit history high interest loans shouldn’t be the first option

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Late repayments can damage your credit rating

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Repayments will increase your monthly outgoings, which can worsen debt

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If used for long term borrowing, payday loans can cause a debt spiral

To find out more on payday loans click here.