People take out payday loans when there is a small emergency and they can’t fund it, from a client who has done a runner to a broken boiler.
If you have take out a payday loan and you cannot afford to pay it back, you are probably feeling incredibly worried about your predicament.
However, rather than getting yourself upset and worked up about it, you need to figure out what steps you are going to take to resolve this situation for the better. With that in mind, read on to discover some of the things that you should do if you cannot afford to repay a payday loan.
Speak to your lender as soon as possible
There is only one place to begin, and this is by talking to the loan provider. You should do this as quickly as you can. Communicate your predicament and work with the lender to sort out a feasible payment plan. There are a number of different options available, and the lender is required (by law) to work with you to find a solution. They may decide to suspend recovering the debt for a period of time or to freeze further charges or interest rates. The worst thing you can do, though, is to sit back and allow charges and interest fees to mount because you haven’t tried to speak to the lender about it.
Consider cancelling the recurring payment
It is likely that you set up a direct debit, and you may want to consider cancelling this. If the money is taken, you may not have anything left for utility bills, your mortgage, rent, and food, which can escalate the problem further, as it will run into other areas of your life. If you need assistance, speak to a debt advisor. There are plenty of non-profit organisations that will assist you and give you the advice you need.
Find out whether you are entitled to compensation
Last but not least, it is worth going back to the terms and conditions of your loan agreement and your correspondence with the lender to make sure that you were not mis-sold the payday loan, to begin with. If there is any chance that you may have been, seek financial mis-selling advice. You may be entitled to compensation or a refund if you have been sold a payday loan and the lender has basically duped you.
Hopefully, you now have a better understanding regarding the options that are available to you if you cannot pay back a payday loan. While this is a worrying time, if you are proactive you can resolve the situation. You may even be entitled to compensation, so the situation could be better than you anticipated.