Payday loan companies have come under a lot of pressure over the last couple of years because of their ability to get people into debt using high interest and fees.
Although new rules have been brought in by the FCA to restrict payday loan companies and their charges, it’s still easy to have a loan spiral into a serious debt problem.
Payday Loan Advice
The first step in avoiding a payday loan debt can be taken before the loan is even applied for, by choosing carefully which company to apply with and understanding the fees.
Having a budget will allow people to know exactly how much they can afford to repay when it comes time to clear the loan and may even stop people requiring the loan.
A budget should include income, expenditure and payments to other debts, if applicable, this should show how much disposable income remains at the end of each month.
This disposable should be more than the amount which will have to be repaid to the loan, otherwise the loan or another expenditure will be defaulted on.
Choose Payday Loan Company Carefully
If you do feel a payday loan is required and there’s sufficient disposable income to repay it when it comes due, be careful when choosing the company to apply with.
Some payday loan companies have included additional policies to reduce the chances of a loan turning into a debt, while some will also charge less interest.
Payday Loan Debt
If someone does find themselves in debt due to a payday loan it’s important they seek advice quickly, before the interest and charges begin to get added.
In some cases just negotiating with creditors will be enough to resolve the debt problem, however a debt solution may be required to clear the outstanding balance.
Some debt solutions will freeze interest and charges so they won’t continue to be added, allowing people the opportunity to clear at least a percentage of the debt.