Escaping payday loans

Sinba

Hi there,

I've gotten into some debt problems with the good ol' payday loan companies and was wondering if it's worth me getting a debt consolidation loan.

I currently owe:

£1100 Quickquid (minimum payment £200)
£512 Wonga (minimum payment £90 but will be ~£150 from January if not paid in full)
£500 PaydayExpress (minimum payment £100)
£150 PaydayUK (I have to pay this off in December or risk missing following payments due to paydays no longer coinciding with the day they want to withdraw)

£2100 Natwest Credit card (minimum payment £55)
£2000 Natwest overdraft (but this is on 0% until at least July 2012 if not longer)

Other monthly outgoings: £65 (mobile phone and a work-related subscription)

The big and immediate issue for me is dealing with the payday loans. My incomings are currently £1930/month after taxes, NI etc but I am about to move into a new place which means I'll need to pay £1200 next month including the cost of the deposit. After this my rent will be £700 per month including bills, so I think there is still a small light at the end of the tunnel somewhere but it's difficult to see at the moment..

If I make the minimum payments next month then that would total £595, and after the bills and rent makes 1860 so I'd be left with pretty much nothing for January so I'd probably have to take another payday loan and compound the problem further, which is something I really don't want to do.

So I'm looking into the possibility of taking a 1 year debt consolidation loan of around £2-2500 so I can pay off the payday loans in one go but I'm wondering if this is a good idea?

I have bad credit because of some stupidity while I was a student so I expect I would only be able to get something with Aspire finance or similar with a 60% APR but even at that high cost spread over 1 year seems preferable to throwing money into the payday crooks pockets for the next few months while I'd have to live on pennies.

What would you recommend?

ihateyes

hi

I have had first hand of dealing with all 4 companies....

it wont all be a smooth ride but here goes.

Open a new bank account - with a new bank, do not dilvuge and details to the PDL's.

Wonga... easiest to deal with... email collections@wonga.com . explain a change in circumstances, ask for interest to frozen and charges... and ask for a 6-9 month payment plan. ask for banking details so youu can pay by bank transfer each month. Wonga will freeze interest immediately.

QQ, PDUK, and express arent as forthcoming.

QQ will offer a 3mth plan, but will want details... dont give, tey pass to Motormile collections, who are more helpful.

PDUK say you have to default... they will then give 3mths...

Payday express WONT play ball..... these will be the ones that cos most aggro. eventually they pass to a collections company..... dispute ll interest and charges when they do.... as part of their license they should help people in trouble... they dont. you will probably need to complain to OFT.

good luck

Emmzi

I reccomend a DMP. Get over to the debt free wannabe board for a discussion of the pros and cons.

Sinba

Thanks for your help, I'll see what the debt free wannabes have to say as you suggest

Finalv

ihateyes wrote: »

hi

I have had first hand of dealing with all 4 companies....

it wont all be a smooth ride but here goes.

Open a new bank account - with a new bank, do not dilvuge and details to the PDL's.

Wonga... easiest to deal with... email collections@wonga.com . explain a change in circumstances, ask for interest to frozen and charges... and ask for a 6-9 month payment plan. ask for banking details so youu can pay by bank transfer each month. Wonga will freeze interest immediately.

QQ, PDUK, and express arent as forthcoming.

QQ will offer a 3mth plan, but will want details... dont give, tey pass to Motormile collections, who are more helpful.

PDUK say you have to default... they will then give 3mths...

Payday express WONT play ball..... these will be the ones that cos most aggro. eventually they pass to a collections company..... dispute ll interest and charges when they do.... as part of their license they should help people in trouble... they dont. you will probably need to complain to OFT.

good luck

Me and my partner are in a similar situation to the OP, just not owing quite as much. you advice has helped a lot. I have been trying to extend one of our loans all day to the Wonga site however it wouldn't let me even though the money is in the bank...so its overdue now

opinions4u

So I'm looking into the possibility of taking a 1 year debt consolidation loan of around £2-2500 so I can pay off the payday loans in one go but I'm wondering if this is a good idea?

If you can get it, afford it, and change the foolish approach to money that you have shown in the past, great. But your credit file is probably shredded.

chalkie99

ihateyes has given you a useful reply but, as well as opening a new bank account and in case it isn't obvious, you must make sure you ask your employers to pay your wages into the new account and you also need to change your 'phone and other subscription payments over.

In other words, leave no money in your existing account at all because the PDL companies will raid it at every opportunity.

Just to be on the safe side get the new account with a completely different bank too.

Sinba

Thanks for the advice everyone. I think maybe I should have been clearer; although I have the amount of debt I do, I haven't missed any payments on any of the payday loans, so my credit rating will hopefully have gone up.

I'm thinking of taking out the new loan as a replacement for the payday loans, so that I can make one monthly payment over a year or two and be done with the payday loans companies for good. Paying about £500 in interest a month is insane, and taking the loan out would mean I would save money and not have to live on pennies for the next 3-4 months while I pay off the payday loans companies.

I can't just up and close my bank account because it has the 0% overdraft on it and it is unlikely I could get the same with another bank, and changing my wages to come into my other account would probably cause me to start paying interest on the overdraft.

fozmcfc

The fact you have so many payday loans, means that clearly you have no idea of budgetting, so live off pennies for 3 or 4 months, isn't realistically going to happen, because clearly you can't control your spending.

Payday loans are looked upon as someone who are over their head money wise and don't look good to lenders, in most cases, they will be a black mark on your credit status.

It is highly unlikely that you will get such a loan, but that is just part of the problem. The main problem is is you are and have been living well beyond your means and that is what you need to address.

You need to get 110% serious, get over to the debt free wanabee board, post up a statement of affairs (SOA) and cut, cut, cut outgoings on everything not essential.

If you do get a loan (your bank is the only place you stand any chance of getting one from), you still need to make cuts and learn to budget properly, or you'll just end up back to square one but worse, you'll have a loan and payday loans to pay back.

I've been there and done the consolidation loan, I've continued to live beyond my means. I've owed thousands and thousands, until eventually I finally grew up, stop and thought this can't go on and started to sort myself out, by cutting all spending, selling rubbish I didn't need and get as much extra income in.

All the good intentions in the world, won't make you debt free, only you changing your lifestyle will do that.

fozmcfc

£65 monthly on a mobile phone, that speak absolute volumes about your situation.

Apples2

Sinba wrote: »

I haven't missed any payments on any of the payday loans, so my credit rating will hopefully have gone up.

The mere presence of a Payday Loan will make most lenders run for the hills.

Sinba wrote: »

I'm thinking of taking out the new loan as a replacement for the payday loans,

As above, if you were in a position to be accepted for a sensible loan, you wouldn't have gone anywhere near them.

Sinba wrote: »

I can't just up and close my bank account because it has the 0% overdraft on it and it is unlikely I could get the same with another bank,

Close - What you REALLY need is an account with 0 Overdraft. You need to live within your means and not think of an Overdraft as your money.