Finance Editor, Kael Tripton Ltd - LBS MBA - Verified against FCA Handbook: 14 June 2026
Quick answer
FCA CONC 5A caps payday loan interest at 0.8% per day, default fees at PS15, and total cost at 100% of the original loan -- you can never repay more than double what you borrowed. Maximum 2 rollovers. Lenders must conduct affordability checks. Unaffordable loans may entitle you to a refund of interest paid.
FCA Payday Loan Price Cap: What Are Your Rights?
Direct answer
What is the FCA payday loan price cap and what does it mean for me?
The FCA price cap (CONC 5A, handbook.fca.org.uk/handbook/CONC/5A/) limits payday loans to 0.8% per day interest, PS15 maximum default fee, and total cost cannot exceed 100% of the original loan -- you can never repay more than double what you borrowed. Maximum 2 rollovers. Lenders must conduct affordability checks before lending.
FCA Handbook - CONC 5A.2.1 - Verbatim Rule Text Source: handbook.fca.org.uk
A firm must not enter into a high-cost short-term credit agreement with a customer if the total cost of credit exceeds 100% of the amount of credit.
Check the total cost cap
For any payday loan, the total repayable must not exceed twice the original loan. Check this before accepting any loan offer.
Refuse rollovers after the second
Lenders can only offer 2 rollovers. After the second, ask to be referred to free debt advice.
Complain about affordability
If the lender did not conduct proper affordability checks, complain in writing citing CONC 5.2A and requesting a refund of interest paid.
Check if the lender is FCA authorised
Verify at register.fca.org.uk. Unauthorised payday lenders are not subject to the FCA price cap.
Use free debt advice
StepChange (stepchange.org) and National Debtline (nationaldebtline.org) specialise in high-cost credit debt.
| FCA HCSTC rule | Limit | Since |
|---|---|---|
| Daily interest rate cap | 0.8% per day of outstanding principal | January 2015 |
| Default fee cap | PS15 maximum per default | January 2015 |
| Total cost cap | 100% of original loan (max 2x) | January 2015 |
| Rollover limit | Maximum 2 rollovers per loan | 2014 FCA rule |
| Affordability assessment | Required before every loan | CONC 5.2A |
Related KT guides
Frequently Asked Questions
What FCA rules apply to payday loans?
Payday loans and high-cost short-term credit (HCSTC) are regulated under CONC 5A of the FCA Handbook and subject to an FCA price cap (PS14/16, January 2015). The price cap limits: interest and fees to 0.8% of the outstanding principal per day, default fees to a maximum of PS15, and the total cost of credit (interest, fees and default charges) to 100% of the original loan amount. A borrower can never repay more than twice what they borrowed.
What is the FCA payday loan price cap?
The FCA payday loan price cap (introduced January 2015) sets three limits: the daily interest rate cap of 0.8% per day of the outstanding principal, a default fee cap of PS15 maximum, and a total cost cap of 100% meaning a borrower can never pay back more than double the amount originally borrowed. For a PS100 loan, the maximum total repayable is PS200. These caps apply to all FCA-authorised HCSTC lenders.
Can a payday lender roll over my loan?
Under FCA rules (CONC 6.7.23), payday loan rollovers are limited to a maximum of 2 rollovers per loan. After 2 rollovers the lender must refer the customer to a free debt advice provider. Additionally, before offering a rollover, the lender must assess whether the rollover is in the customer's best interests under CONC and Consumer Duty (PRIN 12).
What affordability checks must a payday lender do?
Under CONC 5.2A, payday lenders must conduct a creditworthiness assessment before granting credit. This must include a credit search and must consider the customer's ability to repay the loan without financial difficulty. Lending without proper affordability checks is a breach of CONC 5.2A and affected customers may be entitled to a refund of interest paid on unaffordable loans -- this was established by the FCA's action against Wonga in 2014 and subsequent industry remediation.
Can I claim a refund on an unaffordable payday loan?
Yes. If a payday lender granted you loans without conducting proper affordability checks under CONC 5.2A, you may be entitled to a refund of interest and charges paid. Complain directly to the lender first. If the lender is insolvent (many payday lenders have entered administration), register a claim with the FSCS at fscs.org.uk. For solvent lenders, escalate to the FOS if the complaint is rejected.
Primary sources
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