Forest CAB reports increase in clients struggling with payday loans - help is at hand
Lynn Teague manager of Forest of Dean CAB says ' We have seen a large increase in clients approaching us for advice repaying Payday loans,with some clients having multiple loans and struggling to make repayments. Some clients have taken out more than one such loan leading to struggling to maintain their priority expenditure thus increasing their priority debts, causing threats to their housing status and possible bailiff action. Help is at hand'.
A client says:
'I took out a payday loan to get me to the end of a tight month. I thought I'd be able to pay it back quickly, but the interest rate is high and it's making my debt problem worse. The money goes straight out of my bank account so I've got not choice but to pay. I'm worried i have to take out another loan to cover the payments - what else can i do?'
Payday lenders make their money from high interest rates and the fact that people often can't pay back their instalments. Don't be tempted to take out another loan or to 'roll over' your existing loan, which payday lenders often offer as a quick solution. This will be more expensive in the long run.
When you took out a loan you will have agreed for the company to automatically take a certain amount from your account (through something called a continuous payment authority). Most people think that it's up to the company making the withdrawals to stop them - this isn't true. Your bank must stop these payments if you ask them to, so get in touch with your bank straight away.
The next step is to organise a realistic payment plan and prioritise other debts. Forest of Dean Citizens Advice Bureau can help you to do this. we regularly negotiate repayment plans for customers who are struggling with unfair payday loans which mean they can pay them back without getting caught in a debt spiral.
if you've got other debts, it's really important to prioritise the ones that are most important to pay back quickly. These include your mortgage or rent, gas and electricity, and council tax. You can find detailed advice on which debts to prioritise at the Adviceguide website:
http://www.adviceguide.org.uk/england/debt e/debt help with debt e.htm
An increasing number of people are turning to payday loans in these tight times, so you are not alone. To make sure that people aren't getting treated unfairly, Citizens Advice are monitoring how well pay day lenders are sticking to their Good Practice Customer Charter. You can play an important part in helping us monitor their behaviour by filling in the survey at;www.adviceguide.org.uk. You'll find advice and template letters to send to the payday loan company and to the financial ombudsman if you've been wrongly treated.
The crucial thing is to take action now, while you're still in control of your finances.
Contact us on 08444 111 444 for further information and help