loan cost cap

FCA Loan Cap Announcement

Posted on 24th November 2014

Back in July the Financial Conduct Authority (FCA) has announced that there is to be a loan cap on payday loans that are given out in the United Kingdom. The loan cap is effective as of 2 January 2015. This loan cap is detailed as follows:

  • Default charges will stay at £15: this initial rate for all high cost loans must not exceed this rate
  • The initial cost of the loan will be capped at 0.8% per day

FCA Cost cap

Example of the loan in action

If a borrower takes out a loan for 30 days, the borrower will not be liable for more than £24 in late fees and charges per £100 borrowed in the loan.

How the loan cap is understood

Martin Wheatley, the CEO of the FCA says: “I am confident that the new rules strike the right balance for firms and consumers. If the price cap was any lower, then we risk not having a viable market, any higher and there would not be adequate protection for borrowers.” Kristjan Novitski, the CEO of welcomed the news of clear guidance from the FCA. “It is very good news that there are now clear rules for the industry, preventing consumers from spiralling into debt, while cleaning up the industry – making the competition much more fair as it will only be the responsible companies who survive.” is committed to responsible lending and has been since the day that the business was started. Kristjan Novitski says: “We hope these new rules will encourage consumers to come to lenders knowing that their prices are reasonable and have been well regulated. Undoubtedly there is a demand for such business, as proved by our own popularity since our launch in 2011, so it’s good that consumers can now trust all companies to deliver a high level of service where they cannot spiral into debt beyond their means.” The FCA notes that the new price cap will put around 70,000 away from the opportunity of taking a payday loan that they will not be able to pay back.

As a member of the Consumer Finance Association, has focused on responsible lending in order to protect borrowers and lenders. Though the FCA says the loan cap will be instated in January 2015, the loan cap will be reviewed again in 2017.

What do you think of the loan cap? Tell us what you think.

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29th November 2014 at 7:30 am

Is it possible to tell us what are the current rates/rules for peachy, in comparison to the new rules set out above?

Peachy Loans

1st December 2014 at 12:43 pm


Thank you for the comment! Please take a look at our comparison table. It is currently set at 1% but it will be changed to 0.8% in January.


17th December 2015 at 11:14 pm

I asked you guys 2 days ago for the mailing address of your CEO Kristjan Novitski and am yet to receive a reply, can you explain why? Surely under the freedoms of information act you should be able to supply this??

Peachy Loans

18th December 2015 at 8:33 am

Hello Alex,
Thank you for your comment! Please write us at

Have a Peachy Day!