Payday Loans: How I Can Deal with My Payday Loan Debt

It’s an alarm for you if you’ve been struggling or relying on your payday loan month after month. If you think of getting out of debt by obtaining payday loans, it can only make your situation worst. It is never a good idea to consider a payday loan as a way out of debt.

It is much better if you explore other means of options rather than taking out a payday loan to suffice your needs. This usually happens for someone who has no access to an emergency fund or someone who can’t obtain credit elsewhere. The bottom line is to check for more affordable ways to obtain credit other than taking out a payday loan.

Dealing with My Payday Loan Debt

If you took out a payday loan, do not resort to taking out another debt to repay it. Most lenders hold your account details, allowing them to take payments from your bank account. This is known as CPA or continuous payment authority.

In case the payment is rejected by your bank, some other lenders will try to pursue CPA again. Though they might be able to deduct payment successfully, they are only allowed to do this twice, unless there’s a rollover agreement in place.

If you are facing debt problems and piles of debt each month, you might consider debt consolidation instead of taking out payday loans. This was you can avoid dealing with your outgoing each month and having the payday loans added to it.

We’ve seen so many people asking our assistance on how they can deal with multiple payday loan debts. If you’re in the same situation, you have to consider canceling payments on your payday loan, to free up some money on your account and get debt advice right after. This way you can avoid getting into bankruptcy or insolvency later on.

CPA or Continuous Payment Authority

Once you supplied a company with your bank details or card details, you are authorizing them for regular payments. This processor agreement is known as a recurring transaction or CPA (continuous payment authority).

CPA works the same with direct debits. However, it’s hard to stop payments as it does not offer certainty in terms of payment date and amount. Taking this into account, it means that the company that holds your bank or card details can take much more amount if they wish to without your consent. In the position of payday lenders though, they can’t more than two instances to take out money from your account unless a rollover is arranged.

Explaining Rollovers

Once your payday loan is approaching the end of repayment period, you’ll be offered to roll your balance over for another month. This offer from lenders sounds good; however, rollovers normally have additional costs and charges making it more expensive for a payday loan. The rule implies that lenders cannot rollover the existing balance of your payday loan more than twice. Though this is the case, a payday loan is still costly as compared to other credit alternatives. When a rollover is in place, lenders should provide pieces of information along with the contact details of the different debt advice firms or organizations.

Available Help for Payday Loans

If you can’t simply knock down your debt problems and you rely on your payday loan month after month, contact us for free debt advice. It is much better to act now so your situation will not be more difficult to deal with.

Our advice tool aims to help you assess your budget and determine which debt solutions might suit you best. Should you wish to speak via phone, call us on 0800 193 1024.