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COVID-19: We have answered some of our customer's most frequently asked questions
Despite negative press throughout the years, demand for payday loans hasn’t gone away. While quick access to funds – even available for those with poor credit or low incomes – is certainly appealing, the benefits are usually offset by high interest rates.
Traditionally, payday loans were designed as a one-off cash injection for unexpected expenses. However, the reality is slightly different. Reportedly, the average customer takes out six loans per year while half of purchasers use them for living expenses such as groceries.
Some even describe taking out one payday loan to cover the interest rates created by another.
It’s estimated that around 50% of payday loan customers are unable to repay their debts. In this situation, the lender will keep trying to take payment until the matter is resolved. Initially, however, they will usually issue a late fee and increase interest on the account.
Consequently, the longer a payday loan remains unpaid, the worse the debt becomes.
If this occurs, those affected should initially speak with their lender and try to remedy the situation. Most reputable providers are part of trade bodies which have policies in place to help those who cannot repay their loans.
However, lenders can sometimes take action through bailiffs or a debt collection agency.
When payday loan debts begin to spiral out of control, it can be difficult to see a solution. However, one way to resolve this could be through an IVA (individual voluntary arrangement). As payday loans are classed as unsecured debt, these are usually covered within such agreements.
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, they are unlikely to refuse the application.
When the IVA ends, any debts you owe through the payday loan will be resolved.
We hear about payday loans on a regular basis. Usually, it’s from individuals who had no choice but to apply for one and then started struggling under the debt. We’ve helped these people on the path to debt freedom 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 is the right option for you. You can either complete an application form or call us today on 0161 956 2691.
NationalDebtService.co.uk is an independent website created to help users find a solution to their debt problems. Our service is free to use and you are under no obligation to accept any of the recommendations you receive. An IVA (Individual Voluntary Arrangement) is subject to acceptance.
Debt write off applies to unsecured debts and on completion of an IVA. A debt write off amount of between 20% and 80% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.
Call charges may vary depending on your telephone provider. All calls are recorded for training and compliance purposes, but deleted after 6 months for non-customers in line with GDPR guidelines.
At National Debt Service, we do not give advice. On completion of our form, we will introduce you to one of our authorised IPA regulated companies. We use the contact details you have given us on the form to make this introduction. A debt advisor will contact you by telephone. During that telephone call, the debt advisor will discuss your options in more detail. During this call, and other subsequent communications, you will be dealing with a debt solutions partner and not National Debt Service. We may receive commission from the company we introduce you to.
Free money help and advice can be found at the MoneyAdviceService.org.uk