Avoiding the common problems with payday loans...

rich_months

Hi all,

I've had a few DMs over the past few days regarding some fairly extreme issues with payday loans.

I'm by no means an expert on this subject but I have recently spent the best part of April and May sorting out my Sister's financial affairs. Most of which involved the setting up of repayment plans with several payday lenders.

Anyway, from looking on the forums again this morning it's pretty obvious that the majority of payday loan problems occur by not having a basic understanding of what these things are, and exactly how the payday lenders can legally go about getting their money back if you default on the repayments.

I've offered some advice to others caught up in payday loan debt by email and DM but rather than repeating myself, here's where I think most people should start.

https://forums.moneysavingexpert.com/discussion/2735257

saltnvinegar's post was a huge help to me when I first started researching this stuff and I don't believe he's been given enough credit for it.

This website (http://www.paydayloans.info/) also provides a series of videos on the subject, including a list of payday loan alternatives.

Finally, and I know this is a bit unusual, but Labour MP Stella Creasy's office (http://www.workingforwalthamstow.co.uk/) were of tremendous assistance in pointing me in the direction, particularly early on when I had no idea what rights the payday companies had over my Sister, given the grossly one-sided terms they had gotten her to sign.

I hope this helps

Mara69

I find that the common problem with pay day loans is borrowers neglecting to repay them. Despite agreeing to the terms and conditions they then fail to pay and get arsey when the PDL add on charges & demand their money (as per pervious signed T&C's).

PS I love the 'they had gotten her to sign' comment.

27col

Presumably the Op would have preferred that the t&c's allowed her to walk away without paying and without any interest either. Now that is the sort of one sided deal that most borrowers would like. Ain't going to happen any time soon.

rich_months

27col wrote: »

Presumably the Op would have preferred that the t&c's allowed her to walk away without paying and without any interest either.

Of course not!

I know it's quite easy jumping on the whole "payday loan companies are crooks" band wagon, and i'm fully aware that my Sister is 95% to blame for her financial predicament.

My point is that most issues with payday loans could well be avoided IF people choose to fully research them (including the T&Cs) before signing on the dotted line.

DCFC79

rich_months wrote: »

Anyway, from looking on the forums again this morning it's pretty obvious that the majority of payday loan problems occur by not having a basic understanding of what these things are, and exactly how the payday lenders can legally go about getting their money back if you default on the repayments.

Congrats on sorting your sisters finances out. Yes the 2 problems you describe is where some customers of PDL's come unstuck, they also come unstuck when they dont stick to the agreement they agreed to when taking out the loan.

Another problem is some people will borrow for things eg borrow for a holiday.

Apples2

rich_months wrote: »

My point is that most issues with payday loans could well be avoided IF people choose to fully research them (including the T&Cs) before signing on the dotted line.

That is exactly the point.
I'm sure pretty much everyone applying has seen that horrific APR figure but then get blinded with both the relatively small charge for taking it, and the sheer buffuddleness of the chance of cash right now.

Sadly understanding the consequences prior to applying is of little use, nobody is interested. It is only after the eruption of charges does the PDL market become an issue worth discussing.

Who puts their own photograph as their Avatar anyway? Seems it is just the two of us. :cool:

malkyh

Pay it back on time. Easy. Zero problemos.

rich_months

Apples2 wrote: »

Who puts their own photograph as their Avatar anyway? Seems it is just the two of us. :cool:

Yep! Maybe we both just like our own reflection

rich_months

DCFC79 wrote: »

Congrats on sorting your sisters finances out. Yes the 2 problems you describe is where some customers of PDL's come unstuck, they also come unstuck when they dont stick to the agreement they agreed to when taking out the loan.

Another problem is some people will borrow for things eg borrow for a holiday.

Agreed!

Anyone borrowing money from a payday lender just to go on holiday is setting themselves up for a whole world of pain.

The "buy now, pay later" mentality has brought this country to it's knees financially.

Gordon Brown has a lot to answer for. Fiscal prudence my @rse. :mad:

BristolBob

rich_months wrote: »

Agreed!
Gordon Brown has a lot to answer for. Fiscal prudence my @rse. :mad:

I think the people who take out these loans without thought about how they will pay them back have more to answer for.
It is far to easy to blame politicians for issues of PERSONAL and INDIVIDUAL responsibility.

molerat

DCFC79 wrote: »

..........................
Another problem is some people will borrow for things eg borrow for a holiday.

You forgot to mention the other unexpected emergency purchase ............ Christmas.
Just a heads up BTW, it is happening again this year