Payday Loan Trap - Please help.

neosky

Hi all,

Apologies if this is the wrong area to post in but here goes...

Its taken me a long time to sign up here but here goes... I am currently stuck in a payday loan trap. I have loans out with four lenders. I feel so embarrassed and ashamed. It started with one company and then recently work cut my hours so to pay back the original company I took out another loan and then it spiraled.

I have no idea how I will make the four installments for May as due to my hours being cut I am earning less and also have rent and bills to pay etc but I don't want to take out any more loans as I know it will just make the situation worse.

The companies I currently have loans with are =

Sunny - £750 (Over Four Months)
Wage Day Advance - £300 (over four months)
Pounds to Pocket - £300 (over four months)
Peachy - £500 (Over four months)

Any advice or help would be much appreciated. I just don't know where else to turn.

Many Thanks,

Jack.

andyfromotley

Hi Jack,

Welcome, no need to be embarassed.

you need to act quickly as these spiralling out of control will be very expensive.

Call stepchange, national debtline or Christians Against Poverty. They all give good solid advice on debt and are FREE. (Never pay for debt advice).

They will advise you how to proceed.

One of the most obvious instant answers would be to increase your income, better job, second job, third job whatever you can. This will hopefully get you on your way out of this pickle. Lonfer term once your income is sorted you need to look at how and why you came to using such desperate credit and build up savings to avoid a repetition.

Dont delay, phome one of the above organisations asap. Good luck.

sourcrates

Hi,

The last thing you want to do is pay these loans when you cannot afford to do so, it just continues the spiral of borrowing, although one answer would be to increase your income, that is easier said than done, and would not help you short term.

To get yourself out of the constant spiral of borrow/repay, borrow/repay, you have to take control of the situation yourself, that would involve defaulting on your payments, and putting a "stop" on the constant payment authority (CPA) that your lenders have with your bank via your debt card.

Remember new rules mean you will never pay more than twice what you have borrowed, and most payday lenders will sort a payment plan out with you, most, if asked, will settle for just the capital back, minus the interest, if you ask them, and let them know your struggling.

It's all about keeping them in the loop, do not be afraid to default on them, usually it's the only way out of the spiral of borrowing, but as Andy mentioned above, you also need to address the reasons why you got into payday borrowing in the first place.

fusionx212

sourcrates wrote: »

Hi,

The last thing you want to do is pay these loans when you cannot afford to do so, it just continues the spiral of borrowing, although one answer would be to increase your income, that is easier said than done, and would not help you short term.

To get yourself out of the constant spiral of borrow/repay, borrow/repay, you have to take control of the situation yourself, that would involve defaulting on your payments, and putting a "stop" on the constant payment authority (CPA) that your lenders have with your bank via your debt card.

Remember new rules mean you will never pay more than twice what you have borrowed, and most payday lenders will sort a payment plan out with you, most, if asked, will settle for just the capital back, minus the interest, if you ask them, and let them know your struggling.

It's all about keeping them in the loop, do not be afraid to default on them, usually it's the only way out of the spiral of borrowing, but as Andy mentioned above, you also need to address the reasons why you got into payday borrowing in the first place.

you also need to be reminded that any failure to pay them can mark your credit file which could have consequences on future borrowing, I agree that if you are struggling alert them straight away. but short term address do not always meet your long term targets i.e mortgages etc.

sourcrates

fusionx212 wrote: »

you also need to be reminded that any failure to pay them can mark your credit file which could have consequences on future borrowing, I agree that if you are struggling alert them straight away. but short term address do not always meet your long term targets i.e mortgages etc.

The very fact the OP has resorted to payday lending will affect decisions to lend in the future.

Lenders see payday loans on your file, and it's an automatic rejection anyway.

Your credit file is the last thing you should worry about when in this situation, I have seen people go without food in order to repay these type of loans, so you'll excuse me if I take a stronger stance than most on this issue.

charmed1318

Contact them and say you are in financial difficulty. Take what money you need for the next few days and cancel and order a new card. They won't be able to take a CPA (continuous payment authority).
If you can photocopy wage slips to 'prove' your income has decreased and do an income and expenditure form (as simple as you want). If you can only pay them £1 a month for the next few months, tell them.

fusionx212

sourcrates wrote: »

The very fact the OP has resorted to payday lending will affect decisions to lend in the future.

Lenders see payday loans on your file, and it's an automatic rejection anyway.

Your credit file is the last thing you should worry about when in this situation, I have seen people go without food in order to repay these type of loans, so you'll excuse me if I take a stronger stance than most on this issue.

it's a fair stance as you say, i have been there as well.
I have pdl's on my report too, I would say a default is also a pretty strong indicator of poor finances but at least we have told them the out come of any advice that is offered.

Lemonsqueezer78

charmed1318 wrote: »

Contact them and say you are in financial difficulty. Take what money you need for the next few days and cancel and order a new card. They won't be able to take a CPA (continuous payment authority).
If you can photocopy wage slips to 'prove' your income has decreased and do an income and expenditure form (as simple as you want). If you can only pay them £1 a month for the next few months, tell them.

To clarify, a true continuous payment authority is not always effectively cancelled when you replace a card, and there are plenty of examples posted on these boards where this tactic alone has not worked and people have continued to be billed, despite replacing their card.

To cancel a CPA, you need to specifically ask your card issuer to cancel the CPA on your behalf and to cease further payments to the company in question. Banks are now required to accept your instruction to deny further CPA payments (they used to be able to insist you cancel this directly with the company in question) but you must specifically ask for this or they can (and often will) continue to accept payments, even on older card numbers.

neosky

Thank you for all your help and advice so far. I will contact them tonight after work and explain the change in my circumstances and update you with what I hear back.

Thanks so much.

Don_Shackleford

Be prepared for an unholy amount of grief from them. Just stay strong and you'll soon be out of the other side.

It sounds almost silly to have to say this but they really are the biggest ........ when it comes to struggling to repay.

SENDING POSITIVE VIBES :beer:

Newdirections

Hi Jack


What is your current credit score like? As you said, you shouldn't take out more pay day loans but might you be able to get a loan to consolidate all of these pay day loans ?
A good place to try first is your bank. You could also try Avant Credit, First Stop loans, or a high street lender (if your credit is OK). The companies I've mentioned do have quite high APR's but it would be preferable to a pay day loan.