Help! I've been an idiot using PayDay Loan companies!

DBurns

As I'm sure you've probably guessed from the title, I've got myself into a bit of a sticky situation with a couple of PayDay loans. I know that these types of loan are just pure evil and I completely regret ever taking the first ever one. Once this get's behind me I will never go back again, I have without a doubt learnt my lesson.

Right, it all started several months back (probably a year now) when I had a car troubles and decided to take a small loan and it's been a downward spiral from there. Month after month of increasing the loan in size to then eventually getting a second loan from another company to pay off the other and now I have two at their maximum and do not know what to do.

I'm hoping this will help so I will outline my incoming and outgoings along with how much I owe to Wonga & QuickQuid.

Incoming

£1600 P/M (last Thursday of every month)

Outgoing P/M

£540 Rent, gas, water etc.
£193 Loan
£55 Car Ins
£50 Phone
£40 Internet, xbox, experian.
£55 Loan
£40 Credit Card (currently @ £200 which is the limit)
£50 Credit Card (currently @ £500 which is the limit)
£220 Fuel for Car
£1243 TOTAL
This leaves me with £357 to go towards food and anything else that comes up.

PayDay Loans

£1418.35 Wonga (due on the 31st Jan)
£1389.37 QuickQuid (£201.87 due on the 30th Jan, 1187.50 due on the 27th Feb)


With squeezing in some overtime I think I could probably up my wage a bit and have enough so after food I have £400 PM to go to these horrendous loans. This is basically what I've been doing the last 3 months but that's just been feeding interest and not reducing the loans in the slightest.
I literally have no idea what to do, all I've heard from people is just how horrible these companies are to deal with. I've never missed a payment so it's always gone smoothly for me and I'm yet to see their other side.
Any help or advice you could give me would be very much appreciated. I'm stuck in a rut and desperate to get out.

Thank you so much for reading,

Daniel

natlie

Um petrol? that's very high - why?


I have paid my way out with a second job - no more pay day loans for me just a ridiculous amount of other debts
nat

GreenSaints

Hi,

Saw your post and didn't want to read and run.

I would cancel things like your Xbox Live subscription and this is a luxury you can put towards your debts.

Cancel Experian and join Noddle instead. More or less the same service, but for free.

Can you reduce your phone bill as this is very high. My mum is on Giff Gaff and has a great package for £12.

Can you car share or find a friend who travels the same sort of way to split the costs?

What are the APR's for the credit cards? Have you rang them up to ask if they can freeze the interest whole you pay it off?

I have never dealt with PayDay Loan Company's - but have you tried ringing them and asking if you can freeze the interest and pay it off?

I don't know if your bank could offer you one single loan to pay off all your debts which might be better for you.

Hope this helps

DBurns

Hi Nat,

The petrol is high because I work 35 miles away from where I live. I aim to get a job closer to home, but because of my debt I've been worried to take on the risk of a new job potentially ending up in unemployment.

I guess what I'm really after is anyone with advice on dealing with the PayDay companies or anyone who's been through a similar situation as me and had a bit of experience. In my dream like head they'll be more than happy to freeze interest, add zero fees and will let me pay off a small amount each month until they're gone. But I know that's never going to happen and I'm scared that as soon as I call them it will all just spiral out of control, I'll get defaults on my credit file and be in a substantially larger amount of debt.

Regards,

Daniel

Tixy

Hi Daniel

There are 2 main options in circumstances like your
1) cut down on outgoings and increase your income to gradually work your way out of debt.
2) default on the payments and set up a repayment plan with the creditors.

Option 2 will affect your credit file, but will massively reduce the amount you pay overall and should mean you get clear of the debts much quicker. Both those loan companies have agreed not to charge anymore than 60days interest when a customer defaults on their payments, so they won't keep adding interest indefinitely.

If you do decide to go this route the first thing is to cancel the CPA with your bank so that the loan companies can no longer withdraw money from your account.

Then you need to contact them to arrange a repayment plan that you can comfortably afford. If that is £300 then offer then £150 a month and do not let them try to bully you in to paying more. Best to set up a standing order to them so you control how much you are paying them.

edit
Wonga here confirm they are signed up to the good practice customer charter https://www.wonga.com/money/wonga-responsible-lending/

and the charter includes this

If you are having problems
repaying your loan, we will:
> Deal with cases of financial difficulty
sympathetically and positively and do what
we can to help you manage what you owe.
> Freeze interest and charges if you make
repayments under a reasonable repayment plan
or after a maximum of 60 days of non-payment.

quickquid don't mention the charter but do say they are members of the CFA.
https://www.quickquid.co.uk/about-us.html

Know that you’re working with a trustworthy lender. We stand by only the highest lending standards as members of the Consumer Finance Association (CFA).

And according to this http://www.fla.org.uk/consumer/goodpractice2012
All CFA members have to follow the good practice charter

Sinhanada

First things first, congratulations on recognising that you need to move away from the PDL's.

Your best bet would be to contact a company like Step Change or National Debt Line as they will be able to provide some sound advice.

I would suggest that you call each company and explain what your situation is. Follow this up with a letter sent via registered post and a cheque for a nominal amount (£1) as a token payment.

You will need to cancel non essentials such as Xbox etc. Your fuel costs, although high are not necessarily going to cause a major issue - especially with your explanation.

Wonga gave me the hardest time I'm afraid - again this was in 2010, so they may have changed, but even after contacting them, CCCS doing their bit - they kept on adding late payment charges so my initial £500 loan went up to £1800 within a month. QuickQuid were brilliant - I have to admit - they froze charges and in the end I am paying them back the amount I borrowed (+ the original interest).

What I can say is that at the end of this year I will have no debt and that is thanks to some dedicated saving, and the help of StepChange.

DBurns

Thank you so much for your replies!

It seems like a payment plan is definitely the best option for saving on the total to pay.

My only worry is about defaulting on my account. If I default and that goes on my credit file, wont that be on there for six years and stop me from getting a mortgage in this time? My plan is to buy a house next year with the OH but by defaulting that would stop that altogether.

Thank you

Sinhanada

It probably would stop you from getting a mortgage and any other sort of credit - as would late payment markers. It would be good to speak to your OH and let them know what has happened. Use the extra time to save up more for a deposit, but more importantly don't take out any other PD Loans!

Interesting to note though, a lot of mortgage companies will refuse applications if you have taken out PDLs in the past.

http://www.bbc.co.uk/news/uk-25098810

DBurns

I can't believe it!! That's horrendous! If I had known I never would of got one in the first place! Surely that's wrong?! If you borrow and pay back on time as agreed then that should be a positive surely! :mad:

Sinhanada

I agree, but unfortunately, it's not the way that lenders see it. I think it's due to the fact that you could not get "affordable" credit and could not live within your means. Pretty horrendous, but again a sign of why these companies should not be allowed.

MallyGirl

but use of a PDL indicates a lack of financial control - you wouldn't take a horrendous interest loan out for a few days to 'see you through to payday' if you were sticking to a budget that you could afford.