Payday Loan Debt Help

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If you find yourself in a situation where you are struggling to repay payday loans, it is a sign that you need to seek help. Some borrowers consider taking out more payday loans to help repay the old ones or to help them cover essentials the following month, such as bills, rent or mortgage. Taking out multiple payday loans is always a bad idea and can land you in a vicious cycle of debt, which is very difficult to get out of.

Debt advice for payday loans and other forms of short-term finance is readily available and free of charge. When you are having issues with payday loans, you must seek help. Debt advisors can offer expert guidance and advice on your options and how you can avoid further debt, fees and interest. Here are some of our most frequently asked questions when it comes to payday loan debt help:

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What are payday loans used for?

Many people turn to payday loans when they need cash urgently. They are a common form of finance when an emergency or unexpected expense crops up, and you don’t have the funds available to cover it. This could be a broken boiler, a car accident or something else entirely. Some individuals take out payday loans for things they want but simply can’t afford, such as new clothes, a big night out or a holiday. Whatever your reason for taking out a payday loan, you must pay it back on time.

How can I deal with payday loan debt?

If you have found yourself in a situation where you have taken out a payday loan and cannot pay it back, you mustn’t take out another loan. Payday loan lenders will attempt to take the repayment directly from your bank account using a Continuous Payment Authority, or CPA. If the funds are not available, they will continue trying until they can recover the money. If you have cash in your account needed for bills, food or other essentials, this can be problematic. Many borrowers land themselves in this trap of needing to continue to take out more payday loans the next month because they can’t afford the repayments and their usual outgoings. If you find yourself in this difficult situation, you can cancel your payments to payday loan lenders to avoid the money being taken automatically. If you cancel the payment, let your lender know and discuss alternative repayment options.

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Your questions, answered

What is a Continuous Payment Authority (CPA)?

When you apply for a payday loan, you will need to provide your bank account details to the lender. This permits them to take regular payments from your account called a Continuous Payment Authority or a recurring transaction. These payments are very similar to direct debits. However, they are often more challenging to cancel and don’t offer as much protection over payment dates and amendments. You can cancel a CPA by contacting your bank directly and asking them to stop the payments.

What is a payday loan rollover?

If you have a payday loan and have come to the end of the loan term, the lender might offer to roll over the debt for you. This can be very tempting if you are struggling to pay, as it will give you more time to settle the balance. When a payday loan is rolled over, it means the debt is extended until a later date. The idea of rolling over a payday loan might sound good, but it often incurs very high charges and additional interest. Think very carefully before choosing a rollover for your payday loan as next month, the repayment amount will be higher, and you could be in the same position again. Payday loan lenders are only allowed to roll over the debt twice; after this, you must make your repayments.

What will happen if I default on my payday loan?

If you fail to make the repayments on a payday loan, the lender will continue to try to take the funds from your bank account. The longer you have the debt outstanding, the more costs you will incur. Payday loan lenders charge late payment fees, transaction fees and additional interest on unpaid debts. If they fail to receive the payment after a certain amount of time, usually 60 days, they could pass the debt onto a debt collector. Debt collectors are often much more aggressive with their approach to outstanding loans and will regularly call and send multiple letters to your home. If payment is still not made and no alternative payment plan has been agreed upon, it could end up going to court and result in the repossession of your belongings.

Who to speak to about payday loan debt assistance?

Payday loan lenders are responsible for giving borrowers information and guidance on where they can seek debt advice. There are many organisations out there that provide free, confidential advice. If you need to speak with someone about a payday loan debt, get in touch with one of these organisations:

StepChange Debt Charity

StepChange is the most comprehensive debt advice service in the UK. They are there to help you take control of your finances and resolve your debt problems. StepChange offers debt advice for free, and it is available to anybody, so if you are struggling with a payday loan, they are a great place to turn. Their debt experts will help you to work out your income, budget and debts, and then use this information to find a practical solution for your unique situation. A debt advisor can discuss your debt directly with your payday lender and come to an appropriate compromise on your behalf.

National Debtline

Run by the Money Advice Trust, National Debtline is a debt advice charity in England, Scotland and Wales. They can help you get to grips with your payday loan debt and find a solution with your lender. Their website offers plenty of comprehensive debt assistance information, including guides, budgeting tools, and fact sheets. National Debtline also provides a collection of sample letters to help you contact your payday loan lender effectively.

Citizens Advice

Citizens Advice offer guidance and advice on a vast range of issues, including debt. They offer independent debt advice and help you manage your finances and arrange a repayment solution with your payday loan lender. If you have multiple debts, they can help you to understand which to pay back first and how much money you owe overall. Their advisors will be able to help you come up with a budget and plan so you can repay your debt without having to take out further loans. Citizens Advice is available in England, Wales, Scotland and Northern Ireland.

Advice NI

If you are in Northern Ireland, you can make the most of Advice NI’s services. They offer free, independent advice about debt and other problems and are there to help you get to grips with your payday loan. Debt advisors can help you budget, keep your finances under control, and find a solution for repaying your payday loan, which works for both you and the lender.

Need more information about payday loan debt help?

When you are struggling with a payday loan, you shouldn’t have to deal with it alone. There are many options out there for free debt advice, and they can help you arrange repayments with your lender and control your finances effectively. You should never let your payday loan spiral or take out another loan to pay off the first. Debt consolidation loans are sometimes a sensible option for getting all your loans into one place and paying them off over time without worrying about late payment fees and additional interest. However, debt consolidation is often only worthwhile if you have many different debts to pay.

Payday Loan Debt Help