What are direct payday loans?

Many of the payday loan companies you'll find on the internet aren't actually direct lenders themselves; many are brokers that take your details, search their panel of payday lenders and apply on your behalf, pocketing a share of the commission.

Using a direct lender instead of a broker means you know what company you're dealing with, making it easier to look into their reputation, how they conduct themselves and if they're regulated.

You can also make an informed decision about cost - some brokers will pass your application to the company that pays them most commission, rather than the one that gives you the cheapest deal.

It will also avoid multiple searches on your credit file, which can sometimes happen when you apply through some brokers.

We work with the payday loan brokers within our comparison to ensure that they only pass applications made via money.co.uk to regulated payday lenders who don't charge an upfront fee so that you get some reassurance about the service you're going to get.

Should you get a payday loan even from a direct lender?

Payday loans can come with high interest rates and fees, meaning that your debt can increase if you don't repay it quickly.

Missing repayments can impact your credit rating too, making you look unreliable to lenders you want to use in the future. Just seeing that you've previously taken out a payday loan can put off some lenders, even if you've managed to meet the repayments.

There are some less risky ways to borrow money, even with bad credit. Our guide looks at some alternatives: What is the Best Way to Borrow Money Until Payday?

If you decide that a payday loan is your only option, you'll need to decide how much you want to borrow and when you can pay it back, as the amount and term each lender can offer you will differ, as will the cost.

When you've chosen a lender and your application is complete, they will transfer the cash to your account.

How to find the right direct payday loan

In general, the longer you borrow the money for, the more it will cost you to pay it back.

Check each lender's terms so you know how long you have to repay the loan. You'll want to pay it back as quickly as you can, but make sure you have enough time to get the money together to repay so you avoid rolling the loan over, as this will be very costly.

You'll need to compare the interest rate, total cost and fees charged for each loan too, as you'll pay back less if these are lower.