August 16, 2016 11:54 am Written by

How PayPoint Works

Although a recurring payment from your debit account is the most common way to pay for a guarantor loan, there are several lenders such as Amigo and Guarantor My Loan that allow you to repay by PayPoint, a very clever alternative to making repayments for your loan.


PayPoint is a payment facility that allows people to pay bills, utilities and other expenses over a counter. There are over 28,000 PayPoint outlets in the UK which can typically be found in newsagents, convenience stores and smaller supermarkets e.g Nisa Local, Budgens, Costcutter.

For guarantor loan customers looking to pay through PayPoint, they can simply find their nearest outlet and pay for their loan with cash, debit card or their pre-paid card. PayPoint pre-paid cards are typically used for those without a traditional bank or building account and can be topped up as you go. The process of using PayPoint has become very popular in the UK since the company started in 1996 and it has over 10 million customers each week.

How do I repay a guarantor loan with PayPoint? 


In the case of Amigo, your loan will have its own PayPoint bar code which can be found on your monthly statement, online account with the lender or you can simply request it. You will need to provide this code to the vendor in order to verify your payment, but you must make repayment in good time because it can take up to 48 hours for a PayPoint payment to go through.

If your repayment is late, you may be charged late fees or extra daily interest by the lender. You should receive some email and SMS reminders on the days leading up to your monthly repayment so you can get your finances ready and make the repayment in good time. You can also get a copy of the receipt from the newsagent or vendor and send this to your lender as a proof of payment.

Other uses of Paypoint  

PayPoint has multiple purposes for both retailers and consumers, making payments more accessible:

Paying for utilities  

The payment system is registered with all major energy and utility companies so if you received a bill in the post, you can simply take it to your nearest outlet and pay by cash or card. You can also link up your utility bill to your actual meter or PayPoint card so you can just hand this to the vendor at your local convenience store who will be able to process the payment. Make sure that you keep the receipt as a proof of payment as you may need to provide this to your supplier.

Topping up your mobile 

Almost a quarter of all mobile top ups in the UK are transacted through PayPoint. So whether you are a teenager with a phone allowance or you phone abroad regularly, you can top up your mobile credit as you go with companies like Lebara, EE and Skype.  

TV license 

If you are paying for a new TV license or renewing your current one, you can simply pay over the counter at your nearest outlet. A TV license can be paid yearly, quarterly, monthly, fortnightly or weekly through various methods; e.g. TV license can be paid monthly by direct debit, or weekly with a TV licensing payment card. It is illegal to run your TV unit without a license in place and failure to produce one can lead to a huge fine.

Pay for parking

In various locations around London, Walham and Brighton, you can pay for your parking via PayPoint. If the pay and display sign mentions PayPoint, you can pop into a nearby convenience store and pay over the counter provided you state the location code, vehicle registration and duration you wish to park for. The parking can be handled there and then so there won’t be a need to go back to the car or show a pay and display ticket.

For retailers 

For retailers such as convenience stores and supermarkets, PayPoint gives them an extra way to handle payments and it encourages people to enter their premises to pay their loans, utility bills, parking and more. Once in the store, there is the chance that customers might hang around and make extra purchases, or even do their weekly food shop!

There is a handling fee for retailers so it is important for store owners to weigh up the cost of having PayPoint in their store and the extra revenue it can bring.


For those receiving benefits, they can receive money without needing to have a bank account, which might be very common. The website explains that those on benefits can take their ‘Simple Payment Card’ and proof of identity to a local outlet and receive their benefits.

Other ways to repay your loan

The most common method of repayment for guarantor loans and other online loans is via continuous payment authority. This is a form of recurring payment which requires you debit card to be tokenised during the application process. This means that when your repayment comes, the lender can dip into your account and take what is owed to them each month. This is a popular method because it means that the individual does not have to worry about making a manual repayment each month by going to a PayPoint, bank branch or calling up – instead it is all quite automatic, similar to a standing order of direct debit, instead it is just used for repaying loans.

It is rare to have a loan with Amigo or Buddy repaid by cash or cheque. The only real circumstances are if the individual is in arrears and using a debt management company – since repayments are typically handled by the 3rd party debt company and sent to the lender as a cheque. Even so, debt management could be rare for repaying guarantor loans since at this point, the guarantor should be able to step in and pay for the main borrower’s debt.

You will never see repayments carried out by a credit card because this is like using one form of debt to repay another and can cause financial strain for the individual.

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