Payday Loans

If you require some cash and your payday is still weeks away then Payday Loans are one of the solutions you might use. It is very common for many individuals to use this easily accessible service the loan providers are advertising.

Usually, it is quite easy to obtain a Payday Loan, which you can easily do it online using simple applications. The cash you need is usually just a few clicks away. Be aware though that these loans are not without risk, and individuals are advised to avoid them, or at least use with caution when in an emergency and need for money.

Why you should not use the Payday Loan debts

It is important to understand that while you need cash to pay a bill, to respond to an unexpected situation or even to cover the payment of another debt, the payday loan can seem a great way to solve your current problem. However, there are many risks if you fail to pay back the loan.

The main dangers of payday loans are:

Interest rates are among the highest. The loan companies who provide payday loans are known to have very high-interest rates, while more fees are placed upon you if you fail to pay back the amount you borrowed on time. The good news is, some laws protect you from this kind of company. You will not be required to pay more than double the amount you have borrowed.

Another danger related to the Payday loans if the short repayment period they provide to the borrower. Usually, the providers of these loans will not allow you more than one month to repay the loan. Very rare are the cases when you will be given more than one month. Meeting those deadlines is very difficult and it might lead you to a vicious cycle of debt that is hard to escape.

Not respecting the deadlines or failing to pay will penalize you and lead to even more fees and extra charges.

Finally, keep in mind that the loan provider, in this case, will have direct access to your bank account. You might discover that the provider of the loan is charging you for hidden fees, or even retrieving money before the due date. Not to mention the fact that the data of your account might be shared with third parties which might also charge for services or fees you are not aware of.

The debate regarding the Payday Loans has been going on for a while. While it might provide you with a way out when you need it, the risks of being overcharged are quite high. They might damage your financial situation even more and create a negative credit history for you if you do not manage to pay everything on time.

Make sure you ask for professional advice before you get a Payday loan, discuss your options in advance. In the case that you have a contract with small print which the loan provider has not broken any of the agreement, you might never be able to get away from that payment.

The best idea is to avoid the temptation of payday loan debt altogether.

However, if you have already signed a contract with one of these companies make sure to contact one of our advisors to discuss the problem and possible ways to get out of your situation.

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"Become Debt Free" is a trading name of Re10 (Finance) Ltd (company number 4651137) with offices based in Leeds and London. We specialise in providing and administering Individual Voluntary Arrangement (“IVA”) solutions to individuals based in England, Wales and Northern Ireland. We do not administer Debt Management Plans, Debt Relief Orders, or any other debt solutions.  We only provide advice after completing or receiving an initial fact find where the individual(s) concerned meets the criteria for an IVA, therefore, all advice is given in reasonable contemplation of an insolvency appointment. Re10 is regulated by the Insolvency Practitioners Association.

To qualify for debt write off in an IVA with us, you must have a minimum of £7,000 of qualifying unsecured debt owed to two or more creditors. A debt write off amount of between 25% and 75% is realistic, however the debt write off amount for each customer differs depending upon their individual financial circumstances and is subject to the approval of their creditors.

Andrew Bowers FIPA FABRP is authorised by the Insolvency Practitioners
Association to act as a Licensed Insolvency Practitioner.

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