What a refund usually covers
MoneySavingExpert says you will likely be refunded interest plus any fees and charges, and that the amount you originally borrowed is not refunded. On top of the refund you can claim 8% interest a year on payments from the date they were paid, so a £1,000 refund from four years earlier adds £320. This calculator follows that method.
There is no fixed formula in law. The lender or the Ombudsman decides whether a loan was unaffordable and from which loan a refund starts, which is why you choose the first loan yourself. A common outcome described by consumer-credit writers is a refund of interest from the third, fourth or fifth loan onwards, but nothing here predicts your case.
Worked example: five loans, refund from the third
Suppose you paid £90, £140, £210, £260 and £310 in interest and charges on five loans, and you think the third was the first you could not afford. The refund starts at that loan, so the interest and charges to be refunded are £780.00 (£210 + £260 + £310). The £90 and £140 on the first two loans are not included.
Interest on that refund is counted from the date each loan was repaid to the date you enter, here 26 October 2026. At 8% simple a year it comes to £255.17. At the average Bank of England base rate plus 1 point, which with the default 3.75% is 4.75%, it comes to £151.51. Because the date is after 1 January 2026, the calculator uses the second figure and the estimate is £931.51 before income tax.
Which interest rate applies
The Financial Ombudsman Service says its default rate for interest on awards for being deprived of money changed from 8% simple a year to the time-weighted average Bank of England base rate plus one percentage point, for cases referred to it from 1 January 2026. A lender may still offer 8% in its own offer, so the calculator always shows both figures and picks the one for your date.
We do not hold a Bank of England rate history, so you enter the average yourself and the default is today's rate, not an average over your loans. If you referred your complaint before 2026, the 8% basis is used: with the same loans and a date of 31 December 2025 the interest on the refund is £204.06 at 8.00%, against £127.54 at a base rate of 4% plus 1 point, for an estimate of £984.06. We count time as whole years from the payment date plus the leftover days over 365, because the Ombudsman's page does not state its day count. The interest figure is before income tax.
If you still owe the lender
A lender may take what you still owe off a refund. Enter the balance and the calculator shows what is left. With £400 still owed, the example refund leaves £531.51. With £5,000 owed, the refund would not clear it and £4,068.49 would still be owed.
Time limits and where to go
Under the FCA's complaints rules (DISP 1.6.2R) a firm must send a final response within eight weeks of receiving a complaint. The Ombudsman cannot consider a complaint referred more than six months after that final response, or more than six years after the event complained of or, if later, three years after you knew or ought to have known there was cause to complain (DISP 2.8.2R). There are exceptions, including exceptional circumstances.
You can complain to a lender yourself without paying anyone. Claims management firms charge for the same steps, and a lender in administration or liquidation may pay less than the full amount or nothing.
Before borrowing again, check cost and affordability with the payday loan eligibility calculator.
If several debts are weighing on you, compare options with the debt consolidation loan calculator.
What this estimate leaves out
It does not decide whether a loan was unaffordable, value removing loans from your credit file, or add a distress payment, which some decisions award separately. It also treats each loan's interest and charges as paid on one date. For a real figure, ask the lender or the Ombudsman, who calculate interest on each payment.
Inputs for the payday loan compensation calculator
First loan that was unaffordable
The refund starts at this loan and includes every later one. Pick the loan you think the lender should not have given.
Interest worked out to
The date you expect to be paid. It also decides whether the 8% or the base rate basis is used.
Average Bank of England base rate
The time-weighted average Bank Rate since you paid. The default is the rate at 26 October 2026, not an average.
Balance you still owe the lender
Enter zero if every loan was repaid. A lender may take a balance off the refund.
Interest and charges paid
For each loan, the interest, fees and charges you paid. Leave out the amount you borrowed. Enter zero for a loan you did not take.
Date repaid
When you paid that interest and charges, usually when the loan was repaid. Interest on the refund runs from this date.
CALCULATOR QUESTIONS
UK payday loan compensation calculator questions
How much compensation could I get for a payday loan?
It depends on how much interest and charges you paid and which loans the lender or the Ombudsman finds unaffordable. In the five-loan example the refund from the third loan is £780.00 plus interest, an estimate of £931.51.
Do I get the money I borrowed back?
Usually not. MoneySavingExpert says the refund is generally the interest plus fees and charges, not the amount you originally borrowed.
What interest is added to a payday loan refund?
For complaints referred before 1 January 2026, 8% simple a year. From that date the Ombudsman's default is the time-weighted average Bank of England base rate plus one percentage point. On £1,000 paid four years earlier, 8% adds £320.00.
Is this calculator a claims firm?
No. It asks for no personal details and is not legal advice. You can complain to a lender yourself without paying a claims firm.
Is there a time limit?
Yes. The FCA's rules (DISP 2.8.2R) set six months from the final response and six years from the event or three years from when you knew, with exceptions. Check your own dates with the lender or the Ombudsman.
Why does the calculator show two interest figures?
The 8% rate and the base rate plus one point differ, and a lender can still offer 8%. Showing both lets you see the range, while the figure on the estimate follows the date you enter.