Payday Loan Debt
Many people don’t understand payday loans as they have never needed one. There are lots of reasons for considering one but generally it’s because your own bank has turned its back on you. Without short term cash to help you through an issue, it’s easy to worry about what could happen. It might be that you can’t afford your rent, your car is failing and you can’t get to work or you have a family emergency. In those circumstances, you need money from someone reliable who can help in an emergency. But what happens when it gets out of control? Can payday loan debt ruin your life?
How does the debt happen
It often starts with a simple emergency and a first payday loan. The temptation is to borrow too much, when it’s offered it looks really appealing. But taking too much on that first payday loan leaves you short at payday. The full repayment leaves your account and you’re starting the month with next to nothing for bills. A few years ago, the only choice a lot of people saw was to get another payday loan amount. That would probably be for a little more, to pay for the first loan and a bit extra to help out. That’s where the cycle starts and pretty soon customers had multiple loans from multiple companies all paying each other. This all from that first £200 emergency cash loan!
Who was to blame?
It’s easy to try and find someone to blame these days. The customer will blame the lender for letting them borrow the money or charging too much. The lender will try to justify the fees and interest and say the customer should have known better. With payday loans, there is more than one party to blame. That’s why we believe short term loans are the right way to go for many people. By spreading the repayments over a number of months, the hit to the salary on that first payday isn’t as extreme. Most people find they can easily afford the repayments without getting into further trouble. Lenders also take much more care now, particularly on instalment loans to ensure it’s affordable.
If you’re in debt, what can you do?
Firstly, don’t automatically borrow more. More and more lenders are trying to prevent rollover loans. Rollover loans are loans which are taken out purely to pay off another loan. There is a load of advice on the internet including the debt advice service (see the links at the bottom of our page. Talk to your bank again and maybe family and friends to see if they can help. Most of all, don’t panic, most lenders will talk to you and try to help. So don’t struggle with payday loan debt, there is a way out of trouble and it doesn’t need to ruin your life.