Payday Loan Company - Can't repay in full

SimIsOnTheUp

Hiya,

Last Saturday I took out a £500 loan from The Money Shop (one of their 'Cash 'Til PayDay loans where you write out 5 x £100 cheques, and they then present them a month later).

Money Shop charged me £15.99 per cheque, and so gave me back £84.01 per £100 cheque.

So, they gave me back £420.05 after taking their charges (what the hell was I thinking?)

I've been quite ill with alcoholism, anxiety and severe depression, and should never have taken out the loan as I am not working (am currently on ESA), and I'm worried I won't be able to pay it back in full by next month.

This is the second time I've done this within the space of two months, and I'm really wanting to put it right and repay it, before things get out of hand.

I have £250 of the money left, however I need £50 for bills so I will have £200 later today to give back to them.

My query is regarding what Money Shop's procedure is if / when they 'roll over' the remainder to the next month.

So, I go in to the branch tomorrow and pay them back the £200, leaving £300 owing.

Will they 'roll over' the £300 for another month for sure, or is that at their own discretion?

My main worry is re their fees / interest.

Does anyone know how much they would charge to hold off claiming the £300 for a further month?

I remember reading that they charge somewhere in the region of £18 for each cheque that is 'rolled over' per month. Is this all they charge, or is there interest on top of this? (I have a bad feeling that there will be).

I am determined to repay this, and sort it out once and for all. It would just be very helpful if someone on here could help with info regarding their charges / interest, and how it's applied.

The other strange thing, is that this last time (second and last time ever) I took out this loan with them, they didn't provide me with a signed credit agreement at all. They gave me a print out of the cheque amounts / dates to be cashed, but that was it.

I'm assuming that this may be the norm though, seeing as I'd already had a loan from them once before.

Many Thanks,

Sim.

BLT_2

Have just looked at this on the internet. I believe the situation is:

You have given 500 pounds in cheques to receive 420 pounds. If you subsequently repay 200 pounds you will still owe 300 pounds.

They then have the option of reloaning this to you, only you will recieve around 250 pounds. At this point you have borrowed in theory 800 pounds and received 670 pounds.

Based on you being able to repay 100 pounds per month, The following month you can only repay 100 pounds so you still owe 200 pounds, but get 165 pounds back. You have then borrowed 1000 pounds but received 835 pounds.

Based on you repaying 100 pounds per month, by the time this ends you will have paid nearly 200 pounds interest on the original 500 pound loan. Or to put it somewhat more bluntly, 50% of a months ESA has gone to the payday company.

Emmzi

is there anything at all you can sell or pawn to get out of this cycle?

SimIsOnTheUp

Thanks for your reply BLT.

Talk about over - complicating it though!

On the other hand, I'm probably having a blonde moment..

You mention them "reloaning this to [me]"

Once I've paid them the £200 today, I'll owe them the £300 yes, but I won't be taking out any further loans from them.

I realise in one sense of the word, I will be borrowing further (as they'll be suspending the cashing of the cheques for an extra month).

Tired and confused. Sorry if I've misunderstood

I thought they had a set amount as to what they charger per £100 cheque (ie - the monthly 'roll over' charge) + a set interest rate.

Any ideas?

Thanks again BLT,

Sim.

BLT wrote: »

Have just looked at this on the internet. I believe the situation is:

You have given 500 pounds in cheques to receive 420 pounds. If you subsequently repay 200 pounds you will still owe 300 pounds.

They then have the option of reloaning this to you, only you will recieve around 250 pounds. At this point you have borrowed in theory 800 pounds and received 670 pounds.

Based on you being able to repay 100 pounds per month, The following month you can only repay 100 pounds so you still owe 200 pounds, but get 165 pounds back. You have then borrowed 1000 pounds but received 835 pounds.

Based on you repaying 100 pounds per month, by the time this ends you will have paid nearly 200 pounds interest on the original 500 pound loan. Or to put it somewhat more bluntly, 50% of a months ESA has gone to the payday company.

SimIsOnTheUp

Hi Emmzi,

I have considered selling my iMac, in order to raise some cash and start again.

It's nearly four years old, and has been valued at £530.

Am not sure if I could give up my computer / internet access though.

Would rather not do something so extreme, and repay it gradually.

Cheers,

Sim.

Emmzi wrote: »

is there anything at all you can sell or pawn to get out of this cycle?

BLT_2

SimIsOnTheUp wrote: »

Thanks for your reply BLT.

Talk about over - complicating it though!

On the other hand, I'm probably having a blonde moment..

You mention them "reloaning this to [me]"

Once I've paid them the £200 today, I'll owe them the £300 yes, but I won't be taking out any further loans from them.

I realise in one sense of the word, I will be borrowing further (as they'll be suspending the cashing of the cheques for an extra month).

Tired and confused. Sorry if I've misunderstood

I thought they had a set amount as to what they charger per £100 cheque (ie - the monthly 'roll over' charge) + a set interest rate.

Any ideas?

Thanks again BLT,

Sim.

My apologies. have just been rethinking this, ignore my previous post.

You will owe them 300 pounds. you would therefore need to take out a loan for 400 pounds, for which they would offer you 340 pounds. they take off 300 to repay the balance on the original loan, you then have 40 pounds but owe them 400.

They are happy as they have now recieved 140 pounds interest in 2 months on a 500 pound loan

stuartthomas45

no it’s not complete nonsense. Perhaps you didn’t understand it.... if you think that payday loans are trying to rip off poor and vulnerable people or if it is a genuine attempt to provide short-term loans to people who wouldn’t otherwise get one.

Emmzi

sell th ima, get a £200 netbook or cheapy laptop.

you need to break the cycle, and that means sacrifice.

SimIsOnTheUp

Pardon?

Who said anything was "complete nonsense"?

I didn't understand BLT's original reply, no. I made that clear in my previous post.

Your post, and your grammar, is respectfully most confusing however.

Enough already. It's early! :cool:

Cheers,

Sim.

stuartthomas45 wrote: »

no it’s not complete nonsense. Perhaps you didn’t understand it.... if you think that payday loans are trying to rip off poor and vulnerable people or if it is a genuine attempt to provide short-term loans to people who wouldn’t otherwise get one.

SimIsOnTheUp

Not at all. Sorry for my dim ways this morning!

I've just grasped where you're coming from now.

Am tired, but I didn't realise they worked like that (no wonder I'm in debt).

It's just clicked. Jeez, that is rather worryingly extortionate.

So basically I need to get this cleared 100%, within 3 weeks.

There's no way I want to get into the cycle of borrowing more from them to pay the previous loan off and so on..

If I do need more time, and do need to take out another loan for the £400 or £340 to pay off the initial £300, I don't think they'd actually agree to loan me the further £400 in the first place.

They told me last Saturday, when I borrowed the £500, that my 'credit limit' as it were, is £500, and after paying back the £200, I'd only have 'available credit' of £300 left.

However, I'm confused again now sorry.

I don't want to 'take out any further loans' with them.

I thought that they just charge a flat £18 (or something ) fee to roll over each £100 cheque plus interest.

Sorry. Tired. Will have to come back to this and work it out later.

Cheers,

Sim.

BLT wrote: »

My apologies. have just been rethinking this, ignore my previous post.

You will owe them 300 pounds. you would therefore need to take out a loan for 400 pounds, for which they would offer you 340 pounds. they take off 300 to repay the balance on the original loan, you then have 40 pounds but owe them 400.

They are happy as they have now recieved 140 pounds interest in 2 months on a 500 pound loan

SimIsOnTheUp

Thanks for your angle Emmzi.

I'm not sure I'd be comfortable doing this though.

Not until I've tried all alternatives at least.

I've got three weeks, so I won't be making any snap decisions.

Cheers,

Sim.

Emmzi wrote: »

sell th ima, get a £200 netbook or cheapy laptop.

you need to break the cycle, and that means sacrifice.