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Bob_Harding

Hello,

I have a quick question.

I took out a payday loan some time last year and wasn't able to pay it back. The original loan was for £400 but now it has gone up to nearly £2000 because they keep adding interest.

Are they allowed to keep adding interest indefinitely?

Thanks

StepChange_Rachael

Bob_Harding wrote: »

Hello,

I have a quick question.

I took out a payday loan some time last year and wasn't able to pay it back. The original loan was for £400 but now it has gone up to nearly £2000 because they keep adding interest.

Are they allowed to keep adding interest indefinitely?

Thanks

Hi

Welcome to the forum and thanks for posting.

From January 2015 new rules were put in place to cap the amount of interest and charges that can be added to a payday loan to no more than double the original amount.

If the loan was taken out before this date the cap should still apply and the amount to repay in my understanding no more than doubles the original amount. So no they shouldn't be able to continue to add interest and charges under the new rules. You can get more information about the changes to payday loans on the Financial Conduct Authority website.

If you feel that you have reason to dispute the added charges then I’d suggest making a written complaint to the company. If it's still unresolved after this or they don’t reply within 8 weeks then you can contact the Financial Ombudsman Service to take the dispute further.

If you’d like some free and impartial advice regarding this loan and any other debts then you can contact us here.

Thanks
Rachael

Musicfanatic

My financial circumstances are about to change. I took out a loan 2 years ago with payments of £330 per month. When this was taken out I was living with a partner and household bills, rent etc were shared. From April my partner and I are separating. With my new circumstances I will not be able to repay the full monthly amount. I know I need to talk to the lender and am wondering how best to approach them.

My loan provider is the same bank where I have my current account and I am currently £1,500 in the black with them. I am thinking of switching to a new bank to avoid my current lender from potentially taking money from my account for the monthly repayments once I can no longer pay them. As i will need to make an offer to pay a lower amount I am concerned that doing this might antagonize the lender and prejudice any offer I might make. What should I do?

Singlemumstuck

Hi

I need some help/advise, I currently owe £15900 in loans and credit cards and have a DMP in place which I pay £131 a month, I am still getting letters and have had a default letter from hsbc for my credit card. I have looked into IVA I will be paying less but my concern is that my house is in a joint mortgage which my ex is paying as child maintenance, he is on about eventually buying his own place with me buying him out of his half, do I stick with the DMP or go for the IVA which will be paid off in half the time? I so confused I was going to go ahead with the IVA till he said not too. What do I do for the best I so confused and scared I don't know which way to turn?

Former_StepChange_Matthew

My financial circumstances are about to change. I took out a loan 2 years ago with payments of £330 per month. When this was taken out I was living with a partner and household bills, rent etc were shared. From April my partner and I are separating. With my new circumstances I will not be able to repay the full monthly amount. I know I need to talk to the lender and am wondering how best to approach them.

My loan provider is the same bank where I have my current account and I am currently £1,500 in the black with them. I am thinking of switching to a new bank to avoid my current lender from potentially taking money from my account for the monthly repayments once I can no longer pay them. As i will need to make an offer to pay a lower amount I am concerned that doing this might antagonize the lender and prejudice any offer I might make. What should I do?

Hi there,

Thanks for posting and welcome to the forum.

I can understand your concerns about changing banks however, you would be doing the right thing. This is because whilst you're banking with the people you have debt with, the bank has the right to offset funds from your account to pay your debts. If this was to happen, you may find yourself falling in arrears with your household bills or having to cut back on your essential spending.

When you change banks, its worth checking that you are not using a switching service as the current account switch guarantee means that money paid into the account will be sent to your new bank. This may cause you problems when trying to pay off debts at your old bank.

Once you have changed banks, your income is then safe and you don't have to worry about any payments being taken out that will cause you financial difficulties. Believe it or not, most banks actually recommend you change if you're struggling to pay them so changing banks shouldn't make it difficult for you to make reduced payments going forward.

If you find that you're having difficulties and are struggling to manage your debts, we can advise you on the best way to deal with your debts going forward.

You can use our on-line Debt Remedy too which is anonymous and free to use. You can access this here.

Alternatively you can speak to a member of our Helpline and you can find our contact details here.


I hope this helps.
Matthew

Former_StepChange_Matthew

Hi

I need some help/advise, I currently owe £15900 in loans and credit cards and have a DMP in place which I pay £131 a month, I am still getting letters and have had a default letter from hsbc for my credit card. I have looked into IVA I will be paying less but my concern is that my house is in a joint mortgage which my ex is paying as child maintenance, he is on about eventually buying his own place with me buying him out of his half, do I stick with the DMP or go for the IVA which will be paid off in half the time? I so confused I was going to go ahead with the IVA till he said not too. What do I do for the best I so confused and scared I don't know which way to turn?

Hi there,

Thanks for your post.

I can understand your dilemma at the moment between the DMP and the IVA. Without being aware of your full financial situation I'm not able to suggest which of the two would be better suited for you. You're right in that property can be impacted by an IVA however, I couldn't say how yours will be impacted if you looked at an IVA.

I'd suggest seeking some debt advice so you can be made aware of what your options are. We have an on-line Debt Remedy tool which you can access here. This will take your information and work out suitable options to manage your debts. This is anonymous and available 24 hours a day.

If you would prefer to discuss your options over the phone, you can contact our Helpline who can help you. Their contact details can be found here.

We will only recommend solutions that are suitable for you to manage your debts and guide you though the benefits and risks of each so you're fully aware of the right option for you.

I hope this helps
Matthew

Welshgirl77

My sister is in £8000 debt. What can she do?

StepChange_Rachael

Welshgirl77 wrote: »

My sister is in £8000 debt. What can she do?

Hi

Thanks for posting.

I’m sorry to hear your sister’s struggling with debt. It can be very difficult and worrying not knowing what your options are but there’s certainly a way forward for her.

There are many solutions available to deal with problem debt. To find out what solutions are going to be best for your sister’s situation it’s a good idea to get some free and impartial advice.

As a registered debt advice charity this is something we can help your sister with. To find out what the best solutions are for her we’d look to get a good idea of her individual situation including income, expenditure and debts and then we can advise on the most appropriate way forward in dealing with the debts.

You can contact us here to get the ball rolling.

Hope this helps.

Thanks
Rachael

TomShady

Currently £14,000 in debt, credit cards mainly. I havent missed any payments on these but I am slowly getting caught up in the Wonga world...I have used them a couple of times and still never missed any payments...Is a personal loan my best way of sorting this?

I am a home owner and never missed a payment on anything even though I am only making the minimum payment.

I appreciate I am not in the worse condition but would like some advice on what to do to get myself down to no deb

Former_StepChange_Matthew

Currently £14,000 in debt, credit cards mainly. I havent missed any payments on these but I am slowly getting caught up in the Wonga world...I have used them a couple of times and still never missed any payments...Is a personal loan my best way of sorting this?

I am a home owner and never missed a payment on anything even though I am only making the minimum payment.

I appreciate I am not in the worse condition but would like some advice on what to do to get myself down to no deb

Hi there,

Thanks for your post and welcome to the forum.

A personal loan that covers all your debts may help however, this will only benefit you if it reduces your monthly payments and is set at a lower interest rate than your current debts. If not, you could be struggling to make these payments and the debt could cost you a fortune over time.

If you've had to use credit to cover your living costs or pay your credit card payments, it sounds like you're in a position where your debts are starting to spiral. MoneySavingExpert has a helpful article here that may be of use to you.

It's worth seeking debt advice and seeing what your options are if you're struggling to make the minimum payments to your debts each month.

You can use our online Debt Remedy tool here. This free and anonymous and will advise you on the solutions that best suit your current circumstances.

Alternative, you can speak with an advisor over the phone and the contact details can be found here.

I hope this helps.
Matthew