When i was working full time and earning a reasonable income it never occurred to me I might end up in debt, especially when I only took a £200 payday loan.
I fully expected to repay the £200 plus interest at the end of the month and not surprisingly that’s exactly what i done but then they offered me more. I didn’t really need it but thought “I paid the last one, why not” so I took out the £250 loan and when the end of the month came i repaid it in full.
The second month I repaid the loan it left me a little shorter for bill than previously, forcing me to take out a third, albeit smaller payday loan. My thoughts were this loan was smaller and therefore going to be more manageable to repay, which it was.
The problem i found was i only took the loan to pay bills and this meant the next month i would have to repay the loan, interest and the same bill again.This wasn’t a long term solution and meant the next month i still had to borrow the same amount of money from the payday loan company.
I wouldn’t say I was in serious debt with just the one payday loan which I was repaying but it made me believe I could afford to borrow even more.
I was offered a £500 loan from the woman in the shop and even though it was half my monthly income I never for once thought about the risks. I just thought I would repay it with my wages and borrow less the next month and work it down each month until it was fully cleared.
What i hadn’t thought about was the added interest payments I would have to make because the loan was more than the previous month.
This meant a large majority of my income was just repaying the payday loan and to pay bills or buy food I had to borrow from the company again. My plan was to borrow less money each month until it was cleared but i had to borrow more because the interest payments.
I tried to get an overdraft with my bank which i could use to pay it off but by the time i applied there were too many defaults on my credit rating.
This led me to take even more payday loans to try and pay one off but this just made my situation even worse and the debt spiralled out of control.
How I Solved My Payday Loan Hell
My payday loan hell came to an end once I spoke to a debt adviser who told me i would be best entering either a debt management plan or an IVA.
The adviser explained my level of debt was a little small (£6k) for an IVA however it may be best if the payday loan companies don’t freeze interest and charges.
I spoke to a free debt management company who negotiated with the payday loan companies to freeze interest and charges until it was repaid.
I have now finished paying off all my loans and will never take another one of these loans again, even the thought of credit cards scare me.
[accordion title=”Story By” load=”hide”]Paul Bowland[/accordion]