Payday Loans: Help and AdviceAt Consolidation Express, we understand the impact that payday loans can have on your life. We offer a practical solution to help you escape payday loans debt.
In this article, we'll cover:
- What is a Payday Loan?
- What are 3 alternatives to getting a Payday Loan?
- How do I get out of Payday Loan Debt?
- How can I clear my Payday Loan fast?
- How many Payday Loans can you have at once?
- How long do Payday Loans stay on your credit file?
- What is the simplest way to get out of and stay out of debt?
Payday loans are short-term loans, given out by a payday lender. These loans typically come with high-interest rates. They are designed to help people who need to borrow a small amount of money to get them through to payday – hence the term “payday loan”.
Payday loans can be useful in some cases, for example, to cover an emergency expense. However, due to the high-interest rates they can be difficult to repay. For this reason, most debt advice charities and companies suggest avoiding the use of payday loans in the UK.
Here at Consolidation Express, we are extremely proud to offer a solution for people struggling to repay payday loan debt in the UK. Our Debt Consolidation Loans could help people to consolidate payday loan repayments and pay less interest depending on the APR offered.Consolidate Payday Loan Debt
What is a Payday Loan?
A payday loan is a short-term, high-interest, loan that is typically due to being repaid to the lender on the borrower’s next payday. These types of loans are often hard to repay and can lead people into a “debt cycle”, where they need to borrow more money to repay previous loans.
It is important to note that although payday loans may be advertised as “quick cash” or “no credit check” loans, they do will always run a credit check after an application. This is because it is a legal requirement that all UK lenders conduct affordability checks before approving a loan.
If you are trying to repay payday loan debt, there are options available to you. One option that may work for you is a Debt Consolidation Loan. Click here to see if you qualify for a consolidation loan with Consolidation Express.
Do Payday Loans affect your Credit Score?
Payday loans can harm your credit score, especially if you don’t repay them on time. Payday loans are also infamous for being difficult to manage and repay, resulting in you getting trapped in a loop of spiraling interest and repayments.
If you’re able to repay your payday loan on time, then it could help your credit score by showing you are a reliable borrower. However, any positive effect of a payday loan is minimal in comparison to secured or unsecured loans from trusted providers, such as banks and building societies.
What are the consequences of not paying a Payday Loan?
The consequences of not paying a payday loan back to the lender can be extremely serious.
In the short term, you’ll be charged late fees and interest fees will quickly add up. This will worsen your financial position severely and make repaying the debt much more difficult. In the long term, not repaying a payday loan can lead to legal action being taken against you, which could include wage garnishment or seizure of assets.
If you’re struggling to repay a payday loan, it’s important to get help as soon as possible, before the situation gets out of control.
What happens if I close my Checking Account with Payday Loans?
If you close your checking account to try and avoid paying back a payday loan, you might think you’ve solved the problem. Unfortunately, this is not the case.
When you take out a Payday Loan, you’re typically required to give the lender access to your checking account so that they can deduct the repayments from your account automatically. If you close your account, the lender will still try to deduct the money you owe them, which could lead to NSF (non-sufficient funds) fees being charged to you.
In addition, the lender may also take legal action against you to recoup the money you owe them.
Payday loans, and loans of any kind, aren’t something you can escape without dealing with them directly. Fortunately, there are options available to help you escape the cycle of debt associated with payday loans.
What are 3 alternatives to getting a Payday Loan?
Whether you’re already trapped in the payday loans cycle, or you’re looking for ways to avoid taking on a payday loan in the first place, here are some alternatives you should consider:
01. Consolidation Loans
Consolidation Loans are designed to help people who are struggling with multiple debts, including payday loans. A consolidation loan involves taking out a single loan to pay off all your other debts, leaving you with just one monthly repayment to worry about. This can make it easier to stay on top of your finances and get out of debt.
02. Credit Counselling
Credit counselling can help you get your finances back on track. A credit counsellor will work with you to create a budget and can offer advice on how to improve your financial situation.
03. Debt Management Plans
A Debt Management Plan (DMP) is an informal agreement between you and your creditors. With a DMP, you make monthly repayments to a debt management company, which then uses the money to pay off your debts.
What is an Extended Payment Plan?
An extended payment plan (EPP) is an option offered by some lenders to help you repay your loans, including a payday loan. With an EPP, you make smaller repayments over a longer period, which can make it easier to stay on top of your loan repayments. Typically, this EPP will not incur any additional interest on your loan, but it depends on the terms of the plan.
How do I get out of Payday Loan Debt?
If you’re struggling with payday loan debt, and a high-interest rate that makes repayment next to impossible, then you may want to consider a consolidation loan. Consolidation loans can be an effective way of dealing with multiple types of debt, including payday loan debt.
A consolidation loan can help you to get out of payday loan debt, by allowing you to pay the debt off at once, giving you the chance to avoid long-term interest or high repayments. With a consolidation loan, you’ll be able to arrange a repayment schedule that works for you. This can make it easier to repay the debt and get your finances back on track.
Can a Payday Loan be written off?
In some cases, a payday loan can be written off. This happens extremely rarely, but can happen if you’re repaid a significant portion of the debt, and the lender believes that you’re unable to repay the loan.
One solution that allows payday loans to be written off is an IVA. Providing an IVA is completed successfully any debts included in the agreement will be written off.
How can I get out of Debt Collectors without paying?
If you’re unable to keep up with the interest rates, some debt collectors may be willing to accept a lump sum payment that’s less than the amount you owe. This is known as a “final settlement”.
Before offering a full and final settlement, make sure that you can afford to pay the lump sum, and that the debt collector is willing to accept it.
It is extremely unlikely you’ll be able to get out of your payday loan debt collection problems without paying. As such, it’s often a better choice to research debt solutions and find the right one for you.
Can Debt Collectors take your stuff?
Payday loan debt collectors can take your belongings if the debt is secured against your belongings. If the loan isn’t secured, the payday loan company will need to get legal permission to recover your belongings to repay the debt.
Is defaulting on a loan a crime?
Defaulting on any loan, including a payday loan, isn’t a criminal offense. However, if you don’t repay a debt and the lender takes legal action against you, this can result in a CCJ (County Court Judgement) against you.
It’s important to remember that defaulting on a loan can have serious consequences, so it’s always best to try and repay the debt if you can.
How can I clear my Payday Loan fast?
The fastest way to clear a payday loan is to repay the debt in full. However, this isn’t always possible, and may not be the best solution for your financial situation.
If you’re struggling to repay a payday loan, you may want to consider consolidating your debts with a consolidation loan. A consolidation loan could help you to get out of payday loan debt, by allowing you to pay the debt off at once.
How do you break a Payday Loan Cycle?
The best way to break a payday loan cycle is to consider all other options before taking out further payday loans.
How many Payday Loans can you have at once?
There is no limit to the number of payday loans you can have at one time. However, it’s important to remember that each loan will come with its own interest rate and repayment terms. This means that having multiple payday loans can be extremely expensive, and may make it difficult, or even impossible, for you to repay the debt in full.
How long do Payday Loans stay on your credit file?
Payday loans will generally stay on your credit file for six years, even if you repay the debt in full. This is because payday loans are seen as high-risk debts and can harm your credit score. For this reason, we recommend you avoid taking multiple payday loans out in a short time frame.
What is the simplest way to get out of and stay out of debt?
The simplest way to get out and stay out of debt is to repay anything you currently owe and avoid taking out further credit unless it is necessary.
One way to repay all your outstanding debts at once is through a consolidation loan.
Here at Consolidation Express, we can provide a complete range of debt consolidation loans. We offer a practical debt solution to help people across the country escape payday lenders and their debt collection agencies.
We understand that getting out of debt can be difficult, but with the help of a debt consolidation loan, you may find the process easier.Consolidate Your Debts
APRs from 5.8% to 89.9%
We are a broker, not a lender.
Unsecured Loan Representative 69.9% APR
Borrowing £7,500 over 36 months, repaying £502 per month, total repayable £18,083. Total cost of credit £10,583. Interest rate 69.9% (variable). The lenders on our panel offer loans for 12-60 months, with rates from 5.8% APR to 89.9% APR. The Representative Example is based on all loans paid out by lenders between 19th Apr 2022 and 23rd Dec 2022.
Secured Representative 11.7% APR
If you choose to add fees to the loan: Assumed borrowing of £25,000 over 120 months, plus a broker fee of £2,500 and a lender fee of £250 would result in monthly repayments of £345.55, the borrowing rate is 8.6% (variable), the APRC is 11.7% (variable), total charge for credit £16,466.00 and the total amount payable £41,466.00. You can opt to pay the lender and/or broker fees upfront, your adviser will discuss these options with you.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured on it. All rates vary subject to loan amount, loan type and status. Repaying your debt over a longer period of time may increase the amount you pay.