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I can’t pay my payday loan

Better ways to borrow than a payday loan

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Payday loans can be useful in certain circumstances and when they’re used in the way they were intended. They are an option for short term loans or when emergencies arise and there is no other way to obtain the money. Problems can occur, though, if you find you can’t meet the repayments, but there are still options available to you.

You’re not the only one

If you’re in any form of financial difficulties, it can feel like you’re all alone and that no one else is going through the same problems. This is certainly not the case. In fact, over 66,500 people sought help from StepChange in 2013 for payday loan problems.

Keep communicating

The worst thing that you can do if you’re having problems repaying a payday loan is to just hide away. It’s important to speak to the lender straight away and explain the situation. The law means that they have to act in a certain way and provide a range of support options. You need to keep a copy of any correspondence with the lender and document phone calls. This will help you if the company doesn’t respond and you put in a compliant.

A lender’s actions

Payday lenders must provide customers who are having difficulties with fair treatment and give them a reasonable amount of time to pay off the loan. They can in some situations freeze the interest and stop any further charges being added to your account. They must suspend any recovery proceedings if you are working on a repayment plan.

Lenders must be willing to accept small payments for a short amount of time, so that you have enough money left to cover essential items. They are prevented from making excessive amounts of calls and sending too many texts and emails. A lender also has a responsibility to provide you with information on places that offer free and impartial advice on debt matters.

I can't pay my payday loan

Cancel the payment

Payday loans are generally paid off through a recurring payment that is set up through your bank account. This gives the lender continuous authorisation to take money from your account. Many people are under the assumption that these cannot be cancelled directly and that you have to go through the lender. However, as long as you provide at least a day’s notice, you can cancel the authorisation yourself with your bank.

If you are not going to have enough to make the repayment, you should cancel the authorisation. Then inform the lender you have done this and the reason why. If any money goes out of your account once it’s been cancelled, the bank has to refund it immediately.

Don’t roll the loan over

Lenders will usually suggest you roll the loan over to the following month if you’re having difficulties paying. Don’t be tempted to do this, as they will add further fees and interest and you will still have to make the full repayment next month. Payday lenders can’t roll over a loan for you more than two times.

Get free advice

Whatever type of financial problem you have, including payday loans, you should seek help from an independent source as soon as you can. Organisations including StepChange, National Debtline and Citizens Advice offer free support and are there to help, not judge. They will work with you to organise all your debts and come up with a sensible approach to repaying them.




About Catherine Stern

About Catherine Stern

Catherine Stern is a freelance writer with a background in marketing and PR. She currently writes web content on a range of subjects, from finance and business to travel and home improvements. As a working single mum of two young boys she understands the pressures that today’s working parents face and the topics they want to read about.

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