Payday Loan Debt

Payday loans provide quick cash for a short period of time but can carry some of the highest interest rates available.

Payday loans encourage people to borrow money that they cannot usually afford leaving them in a worse financial situation and forced to renew their debt each month. This creates a vicious cycle and usually ends in serious debt problems.

Problems with Payday Loans

• High interest rate - Payday loan companies make their fees look small by presenting them in a monthly format or by a cash amount (see the example below).
• Additional charges - Many people cannot afford to pay off the debt when it is due and have to take out another short term loan to pay off the first one.

Payday loan example

If you borrow £150 for 2 weeks you write a cheque to the loan company for £165 and they give you the money. In 2 weeks time they either cash the cheque or you can pay an additional fee to extend the duration of the loan.

Now it may not sound like much to pay an extra £15 but that works out at a massive 260% APR. These loans are often repeated each month as people get into more and more debt.

How to pay off a payday loan

• Do you struggle to pay off your payday loans when they fall due?
• Do you find yourself handing over a large proportion of your pay to a payday loan company?
• Do you keep renewing your payday loans?
• Do you owe money to more than one payday loan company?

The first thing you should do if you answer yes to any of the above is contact a professional debt advisor. They will be able to provide free advice on how to deal with you debt problems.

If you have payday loans that you would like to clear fill in the form below and one of our expert debt advisors will be able to help.

Any information you provide will be kept completely confidential.