Idiot takes out payday - Pays 2700 on 240 loan

Rekees

Hi all, first time poster who's trying to get their head out of the sand financially.

Firstly I'd like to say that I've been a grade A idiot by starting to rely on payday loans when my partner lost her job thinking nievely 'it would all work out'. It didn't, and as my PDLs built up I buried my head and will honestly say, hid from my problems.

Anyway, I've reached the point where simply put this cannot continue, my outgoings have taken over my paypacket (I should be able to comfortably live on what I earn), yet a very small amount of debt is quite frankly crippling me. I'm aware I should have done something sooner, I'm aware how much money I've frankly wasted and how much of a missery it's made my life.

I have 2 loans outstanding, one with wagedayadvance of 790 loaned (187.50 pcm) and another with uncle-buck at 240 (90 pcm).

Those coupled with the fact that they (along with my own needs) constantly puts me overdrawn so I get charges from HSBC means I lose over 400 pound on average to pay for my cowardice of not dealing with this sooner.

Anyway the uncle buck one (get ready for this) I've had since June 09 and too date have paid them 2700. I still have this months payment to make and obviously, I still need to clear the original 240. I've been told upon contacting them that 'I agreed, I pay' in a roundabout way so what other options are there for me to clear these debts?

I look at myself and laugh at how stupid the fact is that my outgoings as a result of these loans could clear them in 3 months if I was paying them off.

Please, any advice and even criticism I welcome with open arms because I'll be the first to admit I've been stupid, unneccesary and I'm fed up of feeling like Im in a hole working my !!! off to provide for others.

meer53

I'd post a SOA (listing your income and expenditure) on the forum and wait for the advice ! Other forumers will be along to advise you where you can try to improve things. If it really is so bad and you can't see your way out after that, i'd contact CCCS and have a chat with them. They'll sort it out for you.

Tixy

Hi

I would have a read of the first few posts in this thread - Dealing with Payday Loan Companies
and consider that course of option (new account, then trying to set up a repayment plan).

michael1983l

If you really have paid £2700 on a £240 loan, then change your bank and do not tell them. Let them take you to court because a judge will laugh them out of it. £2700 could easily be classed as debt settled. In fact you've probably paid around £2000 more than a court would have awarded them had you not bothered to pay at all.

SailorSam

Ok you've been a fool but joining here is a great first step to getting your life in order, others have been there before you but with hard work and a change of lifestyle have come through it.

alox123

I was in the same kind of situation/still am quite a bit (2 months till I'm out) and started quite a lengthy thread about it.

Its quite long so be ready, but I have managed to dig myself out of the PDL trap despite all my income being eaten up with interest/charges/fee etc. I haven't sold anything (yet) not defaulted and not had to look at a DMP. All through determination and savvy spending

Here is the introduction

alox123 wrote: »

After reading many, many posts about Payday loans I thought I'd share my experience, limited advice and hope people can learn something from this.

Let my first say this, I am far from out of trouble. But I am in less trouble than I was, and I seem to be moving in the right direction. Also, I have not gone to a debt management company, defaulted or found gold buried in my garden.

Let me also concur with everyone else, STAY AWAY from Payday loans. Although I imagine its too late for most people, if you are thinking about it, don't. Most people will say the NEED to borrow the money. I for one thought I did, but I didn't. I thought borrowing £400 from a Payday loan company to waste on booze, clothes, trips to Wagamama was OK. Its not. Looking back, I am sure many people will say they don't need it.

So, after taking out one loan, I needed another. And I needed another to pay that. Then I needed to add funds to another to pay that. And so on. And I ended up plugging the £500 difference between what was coming in and what was going out with a Wonga loan (I used Wonga for this as they are most convenient to manage in my opinion, you can add, pay off, extend etc very easily) This was going OK for 4-5 months then suddenly Wonga tured me down. I NEEDED £500+ to pay rent, bills, food THAT DAY. I was pretty much screwed. My first plan was to spend roughly the next 40 hours in a blind panic. I couldn't eat or sleep. I struggled to talk to people. The moment when the site says 'No, sorry, but we have changed our minds' its terrifying. I was at the turning point. I needed to take this seriously. Luckily, another loan company came to my rescue (in a very vague way) and gave me the £500, that I have been rolling over since.

However, next month I can pay that off. Thats one down, and including the Wonga loan - thats 2. I have 2 more to go, and IF everything goes to plan they will be gone in 10-12 months. Its the long haul I know, but I'm chipping away at it and thats the only way to get its done.


The issues with Wonga was about 3-4 months ago, and it was a turning point - gone from someone reluctantly getting into more and more debt to someone fighting his way out.

I know people are in similar positions and I'd like to share how I dealt with it, plus ask for addition tips and advice - I'm sure there is lots more out there.

In my mind, and for me personally there are 3 hurdles to overcome when stuck on the Payday roundabout. People on the Payday roundabout are beyond the general advice of 'DONT USE THEM'. They are VERY enticing, and, in my opinion aimed at the most financially vulnerable, or basically - desperate people. If you had good credit would you really consider paying 4000% interest on a short term loan. Anyway, if you had good credit would you even need a loan?

So, presuming you don't have the resources to build a time machine you need to over come some obstacles. The easiest one - cut you outgoing AS MUCH AS YOU CAN. Start with the easy ones, drinking, going out, buying things you don't need. I know a lot of people have already done this, they wouldn't have needed a loan if they had money to spare. But, and I can speak from experience, tell you to be strict. Don't be tempted to borrow an extra £20, £50, £100 to treat yourself, don't spend your a bonus or a rebate or that 20p you found down the sofa on something you don't need. Save and focus on your goal - getting off the round about. Use all your spare cash to reduce the loans/take out less and eventually, get rid of them one at a time. I know, its easier said than done - but, it can be done. I know that feeling when you can't sleep at night and your desperately trying to figure out how your going to live off £10/£100/nothing/-£100 this month. Use this as your motivation for hurdle 2 - changing your mind set (hurdle one and two are not mutually exclusive, infact you will need to deal with hurdle two before you can deal with hurdle one in my experience)

So, changing your mindset. I love spending money on nice things. I have since I was a kid. Its thrilling. It can feel good. And when you have no money, its frustrating. Whats more frustrating is having no money, and the no money you have you need to pay off the every increasing interest on loans you wish you never took out.

I needed to no want things I don't need. I know the situation changes for everyone. People get into debt for all kinds of reasons, some people have actual emergencies that force them to borrow. Some people, like me get into because the really want things they can't afford.

For me, it was no different with Payday loans. Ok, some were to avoid bank charges and once I needed some new shoes, but I have frittered most of that money away. When I hit crisis point I suddenly changed. The only thing I wanted to spend my money on was my debts. I figured out how to focus all spare money on this, I figured out how to create spare money and it started feeling good.

A big change for me has been appreciating what I have, and enjoying what I can do for free, or very cheaply. I understood the importance of a 'shopping list' and finally got around to watching that box set I spent £50 on last year, rather than buying another. I found out my girlfriend could cut hair, she introduced me to Primark and £10 jeans (rather than my usual £40 pair), I discovered how to make a disposable razor last a month. The list goes on. The point I am making is that one thing essential for me to do in order to slow the roundabout down was to stop spending. Once I did the easy bits, I did the less easy, but still easy bit and did a budget. This was a revelation, and on closer inspection a godsend. I was paying for things I didn't need, or wasn't using as much as I though. The big ones are phone tarrifs (reduce or cancel them) broadband usage (reduce it) and gas and electric bills were also too high - I was also due a refund. I cut everything back I didn't need - saving about £100 a month. However, as all those stuck on the roundabout know - thats not enough and its not in your bank now - the biggest issue, and hurdle 3 - how to create additional revenue NOW.

This is the hardest part, mainly due to the fact its impossible. You have bad credit, no one will lend to you, your ashamed to explain to you family/partner what situation your in so you can't borrow of them and your rapidly running out of options. How is done? How do you stop the tipping point?

Well, firstly, don't panic. It will just making things harder. I've been in the toughest place with Payday loan companies and I'm starting to see the light - it is possible.

Firstly, work the loans best in your favor as you can. If you have to take another one out, find the lowest rate. If you have one at a high rate, use a lower rate to eliminate this one. I know its robbing Peter to pay Paul, but when your in a needs must situation you need to pick the lesser evil. And when Payday loans feel like your only option, its tough. Whilst you are doing this, join a Credit Union. I found myself in a position where I was rolling over loans every month (still am, but less) but it left me with enough to pay into a credit union. Then, after 3 months I borrowed from the union, paid off a 2000% interest loan with a 1% interest loan. And I have £100 savings with the credit union. That for me almost got the ball rolling. Almost. I needed some extra cash. This next bit of advice should be used with EXTREME CAUTION, it not for everyone.

No, I didn't turn to prostitution.

I listed everyone I pay money to each month, got all their contact numbers and started making calls. My direct debits are spread throughout the month and the direct debit was usually due at least a week before the bill was. I asked them all how long I could not pay (before I got into trouble) Some said I couldn't, some said a week - some said a month. I found 2 that said a month, held of paying and used this money to get the ball rolling, and it worked. I caught up with everything 3 weeks later and paid off another loan. I was now in a position where my income was enough to cover my outgoings, defer the loans and pay a little off.

That was a week or so ago. Next month I chip away at another, then more the next, then more the next. Things pick up in a few month when a phone contract (I don't need) ends and a loan from my bank is paid off. Then in a few more months a couple more loans get paid off and that should be enough by then (about 10-12 months away) to pay it all off. I will have gone from being £500 short a month, to being £700 flush a month. 2-3 months ago I would have not thought it possible, now its my main focus.

To sum this HUGE post up, what I'm saying is if your in a position like I was there is a chance you can fight your way out. Do other people have any other tips? Anything I could be doing better? Anything I've done wrong?

I'm the sort of person that plans for the worst case scenario and I was ready to enter debt management (If anything goes wrong, I still am) but I think I have found a way out. If people are interested I will keep this updated and let you know how it goes, and if your in a similar position and want to share please do.


If you made it this far, thanks for reading.

Oh, and NEVER take out a Payday loan.

The thread also has some updates and other info if you are interested in how you can get out, but be prepared for the long haul -I'm 2 month into a 4 month VERY strict plan and budget. My top tips are: Speak to family/friends about your situation (if you haven't already) and see if anyone can help. Even someone lending you £100 will help pay a chuck of a loan off. Cut down spending and divert all left over cash to paying off loans. Join a credit union and borrow VERY cheaply, and use this to pay off high interest loans. Combine these three things and try to get a snowball effect going where you build up how much you are paying off. Other great sources of income are selling stuff, uniform/general tax rebate, extra hours at work, extra job. The biggest trick is to not spend on anything until the loans are gone.

Hope it helps

poppasmurf_bewdley

michael1983l wrote: »

If you really have paid £2700 on a £240 loan, then change your bank and do not tell them. Let them take you to court because a judge will laugh them out of it. £2700 could easily be classed as debt settled. In fact you've probably paid around £2000 more than a court would have awarded them had you not bothered to pay at all.

That's exactly what I thought on reading the OP's post.

Personally, I think I would go to the County Court and ask for the debt to be set aside.

[Deleted User]

Same here, the OP has my every sympathy this is a real wrong doing of the lender concerned - don't suffer anymore, let them take action it will be in your interest if this reaches court, like the others say close bank account and get new one (different bank or building society) because of possible continuous reoccurring payments authority

x

geoffky

Same here,BEG them to take you to court...change banks and cards and tell them to !!!! off...good luck

Dry_Sweeper_2

Cant you just pay a substantial amount this month even if you temporarily don't pay something else

Least you wont have the interest if you are 30 days late paying your electric bill

Failing that try lending stream, they put the amount you borrow into a 6 month loan, although roughly the same amount of interest as the others you are paying the loan off rather than just the interest every month

londonTiger

at what point does that loanshark (let's be honest that's what they are) decided that hey I made enough money from this guy already let's just write off the remaining debt. I would have thought that after making 1K from the debtor they would just be happy and call it quits. but 2700!! goddamit. I'm in the wrong business.