Major Issue with PayDay Loan

challie1993

I am in a spot of bother, I took out a pay day loan a while ago to cover me to the end of the month, thinking that paying £80 each month would be enough, after 3 installments payed out of the £300 expecting only £60 left to pay i was horrified to find that despite paying off £240 out of £300, i have a balance of £207, too add the the issue i have just been made redundant, had i not been made redundant i would take this with a pinch of salt lesson learnt and never do this again, however due to the circumstances i find myself in a position where every penny matters and paying £207 to clear a debt that will only increase is a big financial hit. I am such a fool, i have pleaded with the lender explaining my circumstances and they have told me this is already a discounted value, they cannot discount further and has frozen the interest for 1 month, is there anything i can do to get a major reduction. the company is so robotic and ice cold. I didn't realise how much interest or whatever the £207 is had accrued to.

Please Help

Thanks

Gaz83

How much did you borrow, and what's the interest rate?

DCFC79

Cut back on your bills eg food, stop buying essentials, have beans on toast or pasta to eat and find a job any job even just to pay the loan off and look for another job.

bris

3x80 and 1x60 is only £300 which I assume is what you said you borrowed. Did you not realise that taking out a loan mans paying interest? Not only that pay day loans have very high interest.


Tbh you should look to family and friends to help clear this as the interest when you default is in the scary high category.

Hannah_M

I guess you've learnt your lesson about payday loans (and loans in general) - make sure you know what you're signing up to! How much were the agreed repayments? Assuming it's an FCA-regulated company, you should have signed a contract when you took out the loan - did you bother to read it?

But now, what should you do - you have 1 month breathing space. Focus on meeting that target.

Cut back on expenses - all the way. If you want to treat yourself - do something free. No movies, no eating out (not even a coffee), if you can walk somewhere don't drive/use public transport - every penny counts! You might feel better about this if you keep track of how much you are saving, you might just be impressed. Also, cancel any unnecessary monthly bills such as gym memberships - parks are free.

Earn some money. Now that your days are free, spend them trying to earn. Don't bother with get rich quick schemes, they won't work. Mow people's lawns, walk their dogs, sell stuff on e-bay, work as a waiter - do whatever you can. If you earn even £10 a day you'll be able to pay it back and have left over by the end of the month. So: do not let a singe day go by without earning at least £10. If you need a day off from this, don't pick the weekend - that's when you're likely to earn the most!

Try to get another job. Discover at least 3 job opportunities a day, follow them up immediately. But don't rely on this - even if you do get a job soon, you probably won't be paid until after your loan is due, so it won't help.

Now, what you should not, under any circumstances, do: Don't take out another loan to pay this one off. If you can't meet your deadline, you'll probably be under a lot of pressure, the interest will be building... but if you borrow to repay you've entered an un-ending spiral of debt. That's the first step to serious debt trouble.

According to the FCA's regulations (see them here: fca.org.uk/news/press-releases/fca-confirms-price-cap-rules-payday-lenders, you will never have to pay back more than 100% of what you borrowed. So, assuming you borrowed £300, you'll never have to repay a total of more than £600. You've repaid £240, owe £207, that's already £447 (which works out as being the standard cost of 0.8% interest per day, by the way). The most they can charge you for late repayment is another £153, which sounds like a lot, but if you borrow from somewhere else to repay, you'll have to pay back a lot more. (This paragraph came out rather confusing - I hope you understand what I'm trying to say!)

If you're seriously in trouble, contact stepchange.org or another FREE debt advice service - don't be scammed into paying anyone for advice.

I recently came across this guide for people who've lost their jobs - it gives great advice about your rights and your options for the future, and goes into a lot of detail about finances. (Find it here: cashfloat.co.uk/blog/money-borrowing/lost-your-job) Hope it helps!

I wish you much luck for the future, and remember: never assume anything! Check every contract before you sign, and then keep checking up to see it's going as you thought it would. Good luck - and let us know if you manage to pay it off!

Hannah

ViolaLass

Is the £300:

- the amount you borrowed or
- the amount you were supposed to pay back at the end of one month or
- the amount you were supposed to pay back over three months?

You've gone for option 3 but what does your paperwork say?

andyfromotley

Hi challie,

call step change who will give you advice tailored to your circumstances.

Never ever sign up for anything again unless you fully understand the cost of it. You chose the single most expensive way to borrow money without really checking what you were doing. Its a hard lesson to learn.

challie1993

Thanks for the replies everyone, I took most of the advice on board I have a job, work is slowly picking back up in the industry, bit the lip paid it off and debt free, I hope I make an example to people not too trust these heartless companies, i have visions of an aristocrat driving a Supercar with a bumper sticker that reads "Your Misfortune, Is My Fortune" Hannah M Yes I have learnt my lesson, and no I didnt read the Small Print, I guess i just took it for granted

Thanks Again

ViolaLass

Could you explain what happened? It's not clear what 'small print' you're referring to.

[Deleted User]

Admiration after losing job but not really an example - you wanted a discount.
All it does is show you were maybe the correct person to lend to - which by no means easy in today's time.

A thread that doesn't name the lender? Alright! Suppose you won't know why you could only access these type of lenders either..

Equally a company who freezes interest doesn't deserve the lastest comment. It has never been more possible for a borrower to end up the better off if they treat their debt as the needful to be paid off double quick. It's the only way to a good ending.

jonesMUFCforever

Not having a pop about this particular OP but it is amazing how many threads on here about people taking out PayDay loans but are then made redundant - .