Pay Day Advance - a downward spiral...

Lucascain_2

Hi,

This is my first time posting in this forum. I am in need of some serious help.

Some months ago, I took out a Pay Day advance. This was for £300. I would never have touched that pay day loan had I knew where it was going to land me. The following month, when it was due to be re-paid, I couldn't afford to pay the whole amount, so I basically paid the interest of the loan and rolled it over to the following month.

Then my finances turn a turn for the worse. I took out another pay day loan with another company. And then another. And another. I currently have FIVE pay day loans with different companies. I'm afraid I've been caught in the downward spiral that is pay day loans.

I am now relying on these loans to get me through the month, simply because I don't get paid enough to pay them all off in full. Infact, after all expenses, I can't even afford to clear a single one. Therefore I'm paying the loans back on pay day, and taking them out again on the same day. I'm even increasing the limit of some just so I have money to live in during the month. Increasing the amount I'm loaning month by month is also increasing the interest, which means the following month I'm paying out even more!

My girlfriend is 8 and a half months pregnant. I am simply drowning in debt, and am struggling to provide for my family. I would appreciate any advice. I'm stuck as to what to do. Does anyone think it would be worthwhile phoning my creditors, and offering them a payment plan, something which would be affordable for me.

Like I said, any help appreciated, I really don't know where to turn.

Thanks
Luke

**Amy**

Hi Luke

Well done for posting, its often hardest to admit something is wrong.

Firstly I would suggest filling out an SOA (statement of affairs).

http://www.makesenseofcards.com/soacalc.html

This shows your incomes, your outgoings and your debts. Once you have done this if you could post it, people may be able to help you out.

If you are really worried, and dont really want to post you might want to contact some debt charities.

www.nationaldebtline.co.uk (National Debtline) and www.cccs.co.uk (CCCS) are really good.

I know its hard, but I think you need to stop taking the loans out. Obviously i know you are finding it hard to live but these are so bad with interest. Is there any way you can get a 0% credit card? I know its a long shot.

Hope this helps.

x

TotallyBroke

well done for posting.
use makesenseofcards/soacalc.html write down all incomings and outgoings. Then in the debt section write all the payday loans as they stand now.
People maybe able to advise on where you can cut back to have more cash to pay one off at a time.
Please do not take out anymore loans it will only get worse.
You will ctc and child benefit soon once baby arrives so that could help.
Breast instead of bottle costs nothing, washable nappies instead of disposable saves a considerable amount of money.
Join your local freecycle (and surrounding areas) and see what baby bits you can get for free. Everything can be washed and sterilised. Or check out the nct website and look for nearly new sales in your area.
New born babies do not need much so please don't be buying 100's of outfits or toys or special seats and bouncers they will be a waste for the first 3months atleast.
Good luck

Lucascain_2

Thanks for the replies, much appreciated.

Unfortunately, I'm going to have to take the loans out this month again. I get paid tommorow, and if I don't take the loans out again, my bank balance will be somewhere around -£1500.

With a baby on the way, I simply can't let that happen. I'm going to try and get a 0% credit card, as suggested, thank you.

Also, thank you for the baby suggestions. I had taken most of the things on board, but it's always nice to have someone who thinks the same.

I'll fill out the Statement of Affairs and get it posted tonight. Again, thank you for your concern.

I really don't want my child to struggle through life, I just hope I can give him a better example of how to run your finances!!

Jesthar

Hi Lucas,

I'd say it was a good idea about the credit card - in fact, even if you can't get a 0% one (I do hope you can!) then as long as you can get a sensible APR a credit card in general might well be a better idea than these loans, given the horrific interest rates. Not very often I recommend credit (and please correct me if I'm wrong, people!), but even several months of paying off a credit card has to better than the current cycle. You just have to be sensible and controlled with it.

Just a thought, do you have an overdraft? If so, what is the limit? You may as well use that and pay it off over time that try and stay in the black by using the loans, I suspect. And if you're up to your overdraft limit, could you try borrowing less money in the first instance and see if you can cope with that? Once you have the cycle broken, things will get easier.

Looking forward to the SoA

~Jes

TotallyBroke

Can you look through your freezer and cupboards and work out how many days you can eat for without buying anything.
Please don't look at it and think meat & potatoes, pasta and sauce.
You can eat anything with anything. It's all edible it might seem strange to eat one thing with another but when needs must.
My Mum used to give us "ifits" an awful lot as kids. "Ifits" stood for If It's in the cupboard then it's getting cooked.
Also apart from your Rent/Mortgage, council tax and utility bills everything could be put on hold.
Please do post your SOA asap. That way people can advise you on what direct debits could be cancelled for this month. And on what to say when you ring the company concerned and explain that there will only be a token amount paid.
I'm not sure if you are entitled but it is something to look into, so close to baby being born, is the maternity grant I think it something like £500. You may also be entitled to a crisis loan which could help you out.
But we need to see your SOA before you can decide how much you would need to borrow to surive this month and next.

annieapple

Payday loan companies should always be avoided. They charge huge amounts of interest and lock people into a cycle that is very difficult to get out of.

I am in a similar situation with regard to money but don't have a baby on the way!

This site http://paydayloantrap.synthasite.com/index.php has a few alternatives you can take when you are short of cash as well as tips on saving money and making money.
Also try CCCS www.CCCS.co.uk and payplan www.payplan.co.uk

GeorgeUK

If you can't get a creditcard, it may be an idea to try joining a credit union. You usually need to be a member with them for a month or two before you can take out a loan, but their rates are pretty reasonable for those that can't usually get decent credit. Some others that have had payday loans have got out of them this way.

RAS

Hi

You might be able to get a loan to cover one of the payday loans from your local credit union.

This will explain them and you can find the nearest one to you.

http://www.abcul.org/page/index.cfm

A number of them offer freedom loans which are designed to get you out of the payday/provident situation. The PR is usually nearer 25% in these situations than the 11% they charge for regular savers.

Aeshna

Lucascain, I know exactly how you are feeling right now. I had 4 payday loans up until last payday when I began to realise something had to give. I repaid one of them, but couldn't repay the other 3. I have contacted each one of them and explained my financial circumstances, and the fact that I've now been in touch with CCCS to move forward with a DMP. One of the companies I spoke to today, and I was pleasantly surprised by their attitude. Another company was phoning me left right and centre, but I've told them to remove my telephone numbers from their database and communicate only by email or post. They haven't come back to me again yet, and that's been about 2 weeks silence. The third payday loan has defaulted me right away and is threatening to take me to court - nothing I can do about it, if they do take it all the way, the court will receive a copy of my incomings/outgoings and will have to take a very small amount. In retrospect, taking out the payday loans was the huge red flag that all was not well with my finances, but you always think it'll get better next month, next month, next month..... I'm sorting it out now and feel so much more relaxed about everything - don't get me wrong, I'm desperate to get on my way to paying off my debts, but I'm not worried sick anymore.

Feel free to pm me if you'd like to know which companies I am with and which ones have been reasonable. In the meantime, you need to address the whole of your finances, and as has been suggested above, it's great if you can do your SOA and let the guys and gals here pick at it to find ways to help you pull your finances back into line.

Aeshna

ward_emmajane

Hi,

It was really reassuring to read these posts and realise that i'm not the only idiot who has fallen into this trap. My credit rating is too bad to get a loan and whn I came across the payday loans i thought they were a Godsend - how wrong was I! I'm now trapped in exactly the same cycle with two comapnies who are calling me all constantly and with Xmas around the corner it's hard to see a way out.

I'm in the process of sorting out by DMP with CCCS and i'm going to start it from January the 1st. new year, new start.

I hope it all works out for you, and congratulations to you and your girlfriend, hope that you're looking forward to your new arrival :-)

x