Why paying early saves money
Under the FCA rules interest on high-cost short-term credit is charged by the day on the credit outstanding, at no more than 0.8% a day (CONC 5A.2.3R and 5A.2.7R). On a £300 loan due in 30 days, repaying on the due date costs £72.00 in interest and £372.00 in total. Repaying on day 10 costs £24.00 in interest and £324.00 in total, a saving of £48.00.
The cap rules add that repaying early does not reduce the amount counted for the daily cap on a given day, although a borrower may still be entitled to a rebate for early settlement (CONC 5A.2.8G). Some lenders say they charge no early repayment fee, so check your agreement.
Worked example: a part payment
Pay £100 on day 15 of a £300 loan and the rest on day 30. If your agreement takes part payments to interest first, day 15 interest is £36.00, the £100 clears that and reduces what you owe by £64.00, leaving £236.00 owed. The final payment is £264.32 and the total is £364.32, with £64.32 of interest and £7.68 saved.
If the lender instead applies the part payment to the amount borrowed first, the total is £360.00, with £60.00 of interest. The order is a term of your agreement, not something we could confirm from the cap rules, so choose the option that matches it.
What a rollover costs
A rollover, or refinance, extends the loan and the interest continues at the daily rate. A firm may not refinance high-cost short-term credit more than twice (CONC 6.7.23R). A £300 loan with two rollovers runs for 90 days and, repaid on day 90, costs £216.00 in interest, so you repay £516.00. That is 72% of the amount borrowed in interest and below the 100% limit.
The 100% cap and what is not modelled
Interest and charges stop at the amount borrowed in total (CONC 5A.2.2R). The calculator needs you to repay on or before the due date. To see what paying late adds, including the £15 late fee, use the payday loan calculator. The calculator does not model a lender's own rebate rules or charges outside the cap.
For a late payment, use the UK payday loan calculator.
In the United States, payoff means something different; see the US payday loan payoff calculator.
Inputs for the UK payday loan payoff calculator
Part payment goes to
Whether a part payment clears accrued interest first or the amount borrowed first. Your agreement sets the order.
Amount borrowed
The loan amount you received.
Daily interest rate
Percent of the amount borrowed charged each day. The legal cap is 0.8%.
Agreed term
The days from borrowing to the due date in your agreement.
Times rolled over
How many times the loan was refinanced to extend it, from 0 to 2.
Pay off on day
The day you repay the rest, counted from the day you borrowed. It cannot be after the due date.
Part payment
An extra payment before the payoff day. Enter 0 for none.
Part payment on day
The day you make the part payment, on or before the payoff day.
CALCULATOR QUESTIONS
UK payday loan payoff calculator questions
Can I repay a payday loan early?
Yes, and interest is charged only for the days you borrow. On a £300 loan repaid on day 10 instead of day 30 the interest falls from £72.00 to £24.00. Check your agreement for any charge.
Does a part payment reduce my interest?
It does once it reduces the amount you still owe. A £100 payment on day 15 of a £300 loan, applied to interest first, brings the total to £364.32, saving £7.68.
How many times can a UK payday loan be rolled over?
At most twice (CONC 6.7.23R). A £300 loan rolled over twice and repaid after 90 days costs £216.00 in interest.
Is there a limit on how much I can repay in total?
Yes. Interest and charges together cannot be more than the amount borrowed (CONC 5A.2.2R), so you never repay more than double. The calculator stops the cost at that limit.