What to Do if You Are Having a Problem Paying Back a Payday Loan

 If you are looking into applying for a payday loan it is important that you understand your legal obligations and the consequences should you be unable to make the agreed repayments on time, or at all. In the modern age there are plenty of responsible lenders out there who offer payday loans, but who also have a reputable customer service strategy that includes care and compassion for customers. This is something that was sorely lacking in the first incarnation of payday loan lenders, those that were known for high interest payments, large fees, and for showing unwillingness to bend and compromise when faced with customers who could not afford to pay back a loan.

Always read the small print prior to agreeing to any payday loan, but you will find responsible lenders that are willing to sit down and discuss your finances, putting together a payment holiday, or restructuring repayment terms so that they suit a new financial circumstance.

If you are struggling to pay back a loan that you have taken out there is one thing for certain: ignoring the problem will only make things worse for you and your future financial situation. Never sit and ignore a problem hoping that it will go away, don’t panic in silence. There are things that you can do.

First, contact your lender immediately. As stated, times have changed and the new wave of payday loan and loan lenders are a much nicer breed than their predecessors. Remember though, by law, your loan lender must do the following:

·       They must direct you to sources of free and independent debt advice

·       They must suspend recovery of your debt for a reasonable period of time if you are in the process of developing a repayment plan

·       They must allow you reasonable time in which to repay the loan, including freezing interest and suspending charges

On top of the legal requirements, the best payday loan lenders should always act in a way that is reasonable towards you once you have notified them of your current predicament. They should not continue sending you texts, emails and phoning to ask for payment, and they should allow you to make small token payments to bring the amount down slightly, if by taking the full amount they are leaving you without enough money to pay your mortgage or rent, to buy food, or to pay for your utility bills.

Always keep all correspondence between you and your lender, and make notes of any phone calls, as this will provide you with evidence should you wish to make a complaint at a later date through the Financial Ombudsman.

Financial problems can happen to anyone. It could be that you have suffered an unexpected redundancy, suffered an accident that has caused injury, or been taken ill, all preventing you from continuing work. Whether this is a short-term problem, or a long-term expectation, your loan lender will expect you to be able to continue making repayments on the agreed terms – unless you inform them of your difficulties and begin negotiations to work out a resolution.

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