A payday loan can now cost you almost 6,000% in interest. Payday lender Wonga says the cost of a £150 18-day loan will now cost their customers £33.49. That's equivalent to an annual percentage rate (APR) of 5,853%.

Although the numbers are based on a full year, the figures remain outrageous. If you're running short, what are the Wonga alternatives?


Payday options

If you live in certain parts of London, check out cuok. This credit union alternative claims a £400 loan over one month will cost you just £8 in interest compared to £120 plus from the usual raft of payday loan lenders.

Anyone who lives or works in Southwark, Lambeth, Westminster or Camden can become a member of London Mutual Credit Union for £7 says cuok. "This covers a one off non refundable membership fee of £2 and a deposit of £5 in a credit union savings account. The amount of £7.00 can be deducted from your first loan to pay for your membership."

Shorter than a year

Not in London? There are credit unions all over the country, all regulated by the FSA. Enter your postcode here to find one near you. Thirty day loans aren't as popular, typically, with credit unions, but they're still possible. More popular are loans that last between six and 12 months.

The stumbling block with credit unions for many is that they're more difficult to get cash from if you don't have a mainstream bank account. Wonga is the first to point out that calculating APR rates for short-term loans is misleading - their average loan lasts nothing like a year, they claim.


Advance?

Bear in mind a bank will charge you a significant sum if you go beyond your authorised overdraft (and likely charge you for simply informing you by letter about it). Of course, you can always - try - asking for an advance from your employer.

Other alternatives include a player like Provident Personal Credit. But they are expensive too with an interest rate of almost 400% APR. A £200 loan repayable over 32 weeks with 32 weekly payments of £10 would cost you £320, it claims on their website.

Next week the Office of Fair Trading will confirm if it will refer the payday loan industry to the Competition Commission.


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