Payday Loan Mess **

[cagger11]

I have got myself in to a real mess.

 

I have been using payday loans for around 6 months and can't seem to break the destructive cycle which has been made much worse due to me moving cities to start a new job (the moving costs/overlap in rent has caused me to lend more money).

 

I currently owe aproximately £1200 (will be over £1300 by the time it gets to collection date) to Wonga which is due to be collected from my bank account on 18th December and I owe Payday Express £500 which is due to be collected on 16th December.

 

I get paid on 22nd December so there is a gap of 7 days for Payday Express and 5 days for Wonga. I take home £1600. What has been happening for a couple of months is that I pay off the loan in full and then I have to borrow again to have money to live on. Its becoming a nightmare (the interest rates are draining me) and I know I'm stupid for getting myself in this mess, I just couldn't see another way of raising the funds to move and start my new job.

 

Even worse, to extend Wongas loan I have to pay 10% which I can't afford to do so they will try and take the money and I won't have the funds and will then be charged for being over drawn and for not having sufficient funds which is £25 and £35 with my bank - Santander. I'm not sure what the score is with PayDay Express, was going to call them??

 

I really don't know what to do about this situation that is fast spiralling out of control. I don't want to get a default on my credit file as it will be much improved next year (I currently have a poor credit rating) and I want to try and get a mortgage in the next couple of years. Is there some way of freezing the interest and agreeing a lower monthly repayment plan without defaulting?

 

Any advice would be much appreciated as I really don't know what to do.

[sillygirl1]

Try talking to them and ask if you can pay just the 10% rather than 10% plus interest.

 

Get another bank account asap, Halifax do an online one where you get a debit card and it also has direct debit facilities and online banking.

 

Wonga sadly will try to take every penny out of your bank account by whichever means they see fit, and quote terms and conditions at you.

 

Keep everything on one thread, remember this is a busy Saturday for most people and they are probably nearly all out shopping....

[cagger11]

I have another account with my bank - a basic account. Do you think it's worth gettting my wages paid in to that account? If I incurr fees from my bank for not having the funds in when Wonga attempt to collect could they in theory take the money from my basic account?

 

I have been doing some research and I think a DMP might be the best option for me. Do you think I would have some success in freezing interest and paying my creditors back the money I owe them over 6 months? Has anyone been successful in getting the interest frozen on pay day loans??

 

Thanks for the advice.

[Kitten1]

I'm in the process of getting my payday loans sorted too. First job is to get another account at another bank as banks will take money from one account to pay debts on the other. It's called the right of offset.

 

Cancel all dd and cards - tell your bank you have lost it and you will get a new one with different details.

 

If you can, change your phone numbers on their systems or you will get bombarded with calls.

 

You will have to work out what you can afford to pay them and stick to it. They will make threats etc but will eventually back down and accept your payments.

 

Also, none of my payday loans show on my credit report at present but you may find that they do report a default at some point. I'd rather they did that then have to struggle to continually pay them silly amounts I cannot afford.

 

Hope this helps. Sorry it's basic but baby crying!!

[cagger11]

Thanks so much for the info. It does help knowing what I have to do now to sort this mess out.

 

I think I'm going to approach The Co-operative Bank and see if they can open me a basic account. I cant go with Halifax from a previous loan with them :/

 

That's the same with me - they don't show on my credit report either (at the moment). Hopefully, if they agree with my proposal and freeze interest I will be able to clear this debt in 6 months. Does anyone know where I can get a template for a letter to send to my creditors to ask them to freeze interest and propose what I can afford to pay back to them each month? It would be good to know how other people have got on in this process. My worst fear is they won't freeze interest.

[Kitten1]

I have opened a basic account with lloyds tsb online. It is very basic in that I can only draw money out at tsb machines or the postie but it does come with a debit card. That was the most important thing for me.

 

I basically wrote to my creditors stating financial problems and wrote out a VERY basic income and expenditure. I then worked out pro-rata payments and offered them. I asked for interest and charges to be stopped and gave them a full breakdown of what I would pay and when. This also let them know when they would have the money repaid by.

 

Make sure when you work out what you can afford that you include money for incidentals so you don't end up being in a situation whereby you need to borrow more.

 

I had one company threaten me with allsorts but stay strong!!

[cagger11]

Thanks for the advice, I have just applied for a basic account with Lloyds TSB. Do you recall how long it took before you heard back from them?

 

So my next step should be to write to my creditors and tell them I am experiencing financial difficulty and tell them what I can afford to pay with a breakdown of my expenditure?

 

Did you manage to get the interest frozen kitten? That's a real concern with it being so high.

[Jamie Kingston]

normally you get the interest frozen when going on a payment plan to pay off the loan. it really depends who the lenders are...