Is a payday loan always a no-no?

Herzlos

It's not always bad, sometimes it can work out to be the cheapest option (if you're avoiding a bigger penalty fee for a missed payment or saving more than the fee in a sale), but it should be a last resort, especially if you can't guarantee that you can pay it back.

If you're happy borrowing £100 and paying back £125 a couple of weeks later I'd see if you can do the same with a friend or family member and let them have the £25.

Other options I'd be trying to exhaust first are existing credit cards, then overdrafts, then trying to sell off some unwanted stuff in person (pawn shops, car boot sales). You're too close to Christmas to get a new card in time or to be able to send anything away to sell.

mustang121

Christmas is about spending time with friends and family. Not buying overpriced commercialised crap that people don't actually want, need or use.


Getting a pay loan for Christmas presents is one of the single most idiotic reasons ever.

Saturnalia

Thanks for all your advice.

I didn't realise that a PDL leaves a scar on your credit rating even when paid back on time. That's frightening. I ended up in a mess years ago, serviceable loans followed by unintended unemployment I couldn't get out of, and the situation escalated into crisis very quickly. I got a DRO and from that point on have not been in debt for a single day, working hard to clean up my credit rating, and now to find out that one measly £100 for three weeks could destroy all that! Now I get it why you all said Christmas wasn't worth it!

But it is going to be okay. I've got the advance coming in on Monday and even with £100 less in my pay at the end of the month, I'll still have way more than enough to get through January.

And I have been doing some online window shopping and found the kinds of gifts I wanted to give at much cheaper prices than I'd seen elsewhere, so come Monday I'll be ordering and be a lot better off than I'd budgeted to be.

So I'm not quite as skint as I thought I was, and from first payday onwards I'll be squirreling money away so won't be in a knot this time next year.

2DG

From my personal experiences with pay day loans, regardless of whether you need the money or not, its just not worth having pay day loan debt that will 1. effect your credit rating hence affecting future probability of getting on in life (ie owning your own home); 2. Will cause you and probably your family untold stress over something you could without.

These guys are just loan sharks and I can't believe that regardless of what either the government or these loan sharks say, why these ways of getting credit are even legal from the amount of damage they do to the social fabric of society. The sooner they are banned, the better.

iolanthe07

The sooner they are banned, the better.

But if they are banned something even worse will step into providing loans to people who can't get them from mainstream lenders. At least Pay Day loan companies don't come round to your house with baseball bats. They need to be regulated, not banned. They do serve a need.

bigadaj

2DG wrote: »

From my personal experiences with pay day loans, regardless of whether you need the money or not, its just not worth having pay day loan debt that will 1. effect your credit rating hence affecting future probability of getting on in life (ie owning your own home); 2. Will cause you and probably your family untold stress over something you could without.

These guys are just loan sharks and I can't believe that regardless of what either the government or these loan sharks say, why these ways of getting credit are even legal from the amount of damage they do to the social fabric of society. The sooner they are banned, the better.

Well you could always set up your own ethical poor credit lender, it's been tried before and unsurprisingly, many of the people you lend to don't pay back and you rapidly go bust. No defence of payday lenders but there's a reason why they are used and why their rates are so high.

chriswatts

Must say that Payday loan advertising is certainly doing an excellent job on misinformation. I can't believe how people can actually believe ARP doesn't mean anything, the companies have obviously done a good job, sure you don't pay over a full year, but take out one PDL and you'll find that a lot of other sources will soon be closed to you and your reliving on them. Also if you can be charged 35% APR on a credit card, 1000% APR is extortionate even over a month.

There should be a warning placed on their ad's "Warning a payday loan can seriously damage your ability to get credit and a mortgage for six years"

I've signed up to Noddle for the free credit report and there's details of stuff that I've taken out over six years past.

The only way to get rid of these parasites is to compete them out of the market with credit unions, bans just won't work.

randomnut

Never get a loan out just to pay for presents for other people.

To be honest a card is all it takes, with a personal message rather than simply signing your name.

The fact you thought about them enough to do that will go miles especially as you're skint for the time being. Friends will understand.

savingjenny

Your family wouldn't want you to get into debt for them!


I love xmas, it's a special time of year, but posts like yours make me feel sad it has turned into a huge commercial con

[Deleted User]

SilverSaloon wrote: »

I really don't understand people even considering getting into debt for Christmas.

Couldn't have put it better myself.