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Payday Loan Debt

Dealing with Payday Loan Debt

Dealing with Payday Loan Debt

You needed a payday loan and we’ve heard all the reasons before. Perhaps you just needed the money to stretch until your next paycheck, something broke which needed to be fixed, or maybe you needed the money for grocery shopping.

Regardless of the reasons, know that you aren’t alone. Payday loans aren’t a bad form of lending but, with often high interest rates, even a few borrowed pounds can quickly turn into an unmanageable sum.

In this situation, you – similar to so many people who have spoken to us about payday loan debt – have done the right thing; you’ve decided to work with us to help clear what’s owed.

To find out – for free – if we can help you with your debt, click the button below:

What happens if you can’t pay a payday loan?

If you can’t make the payment on a payday loan, then the lender may issue a late fee and increase interest on the account. Alternatively, through a system called ‘continuous payment authority’ (CPA), the payday loan provider may take money from your bank account. Of course, if you don’t have the funds to make a repayment this situation could push you into your overdraft.

If the payday loan required a guarantor, then the provider may take money from that person’s account instead of yours. Finally, in extreme cases, the lender may turn to a collection agency or bailiff company to reclaim what’s owed.

Therefore, the longer a payday loan remains unpaid, the worse the debt becomes.

Continuous payment authority explained

During the approval process for a payday loan, covered in the terms and conditions, typically you will provide your credit or debit card details to the firm and authorise them to take regular payments. This is known as continuous payment authority.

If you fall behind on the payments, the CPA may mean that money you can’t spare still goes towards the lender. Furthermore, if account details change, there’s no guarantee the CPA will be updated in time.

Payday loan debt write off

If struggling to repay payday loans, it’s natural to just want them to go away. As a result, many look towards writing off their debts. Despite some claims you may have heard, it is impossible to write off 100% of your debt without consequence.

On the subject of payday loans though, you could write off a substantial part of what you owe through a debt solution such as an IVA.

In essence, this is a legally binding arrangement designed to help you with your debts. During the IVA application process, a qualified practitioner will discuss your circumstances, determine how much you can reasonably afford to pay, and the length of the arrangement.

This proposal will then be delivered to your creditors. In this case, it would include the payday loan provider. If the arrangement is beneficial to them over bankruptcy, they are unlikely to refuse the application.

When the IVA ends, any remaining debts you owe through the payday loan will be resolved.

Here to help with payday loans

We hear about payday loans on a regular basis. Usually, it’s from people who’ve had no choice but to apply for one and then struggled under the debt. We’ve helped these people on the path to regaining financial control and can assist you as well.

For a no-obligation conversation about your circumstances, get in touch today. We can discuss your payday loan and determine if an IVA – or another debt solution – is the right option for you.

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