Payday Loan Debt Problems

Payday loans are used to help people with week to week funding gaps. A typical £100 loan costing £125 to repay after one week. However, when it goes wrong and you can't afford to repay the loan what happens? We observe what happens debt solutions are available for people with payday loan debt problems and what you should do to carry on this problem.

What is a payday loan?

Help With Payday Loans

Payday loans first became popular in the United States and fast spread across the Western World for people who need help with their funding short fall until their next payday. Since inception, payday loan companies have tweaked their technology and cost methods to ensure they can provide an exceptionally speedy service. Some lenders are claiming to be able to have the money in your bank within 20 minutes. Advertising by companies providing this prestige often centres around receiving the money in your bank immediately and enabling you to spend it within an hour.

Payday Loan Debt Problems

The payday loan is usually for less than £500 for first time customers and for a short term period (usually in the middle of 7-10 days). You can apply online or on the high street. The interest rates for payday loans can vary from 2,000% to over 4,000% in the Uk. These high interest rates are one of the problems people have with cash progress loans, especially when it's a struggle to repay the money borrowed. Whilst the preliminary loan may be small, the interest rate means the reimbursement can be large, particularly if the money is repaid late.

"I can't pay back my payday loan"

So, what would happen if you cannot afford to repay your payday loan? The payday loan enterprise would rightly expect their money back along with the fee they charged to lend you the money. If this does not happen then you can expect supplementary fees and charges. These payday loan charges will consist of a late cost fee and a daily rate on top for the excellent balance. With payday loan debts, the longer you leave the debt unpaid the harder and more high-priced it becomes. The best situation is to calmly sit down, perfect an income and expenditure, which includes what you spend on your mortgage, rent, food etc and then check what you have to pay contractually to each creditor each week or month. If you don't have enough money to live and pay your creditors each month then you have a debt qoute where you need help. If you are struggling to make the ends meet then you should still speak to a debt advice charity for help because they have solutions to debt which can help you.

Payday loan debt solutions

There are debt solutions available for people with payday loan debts which you can way via a registered debt charity. These solutions start with token payments towards your payday loan enterprise each week. These token cost agreements may not be for the full number however if the charity can get interest and charges freezing then at least the qoute will not get worse and you will be repaying your debts.

If you have other unsecured prestige debts then you may want to think about a debt arrangement project (Scotland) or debt administration plan. These solutions wish you to pay back all of your debt but over a longer than agreed period. This way, your creditors get back all of their money and they may even ice interest and charges. The benefit for you is you will have negotiated with your creditors and helped to avoid the situation growing considerably worse.

An Iva or Protected Trust Deed would allow you to repay your debt, together with any type of loan over an agreed period of time. If you assert the arrangement you will be debt free in 3 or 5 years having paid back an affordable monthly amount. You would only repay a division of the money you borrowed via your payday lender and other creditors.

In a worse case scenario you would have to enter Bankruptcy to decide your debt problem. This is rarely for people with just cash progress loan debts, but people who have multiple creditors with lots of debt. All of these solutions will have a negative impact on your prestige file (a default will be added and last for 6 years development being accepted for prestige in the future difficult).

Payday Loan Debt Problems