When You Can’t Repay Your Loan
Firstly – do not panic! If you can’t repay your payday loan or are struggling with the repayments of a short-term loan from us here at LoanPig then there are a whole host of things that you can do to help yourself out of a potentially bad situation.
As a responsible and an ethical payday loan lender, we do not want to be making your financial situation worse. That is why we have put together this blog for you so that you can take proactive steps towards the successful repayment of your loan – without incurring further financial difficulties!
There are a great many reasons why an individual may suddenly find themselves unable to repay their payday loan or unable to make the monthly repayments on a short term loan. For example:
- You lose your job or are suddenly made redundant, your shifts are reduced at work, or you fall ill and are unable to work
- You need to use the funds that you had earmarked for your loan repayments for an emergency expense, such as emergency dental work, medical bills, a vet bill, a vehicle fix/repair, mortgage payments or rent
- You need to take unpaid time off work to care for a loved one who has fallen ill or had an accident and needs full-time care
If any of the above applies to you and/or to your situation then instead of not paying your pre-agreed amount on the pre-agreed day which could result in extra charges being added to your account, or it could cause your account to be placed into arrears (which will have a negative impact on your credit score and on your future applications for credit) reach out to either us (or you chosen/applicable lender) a designated debt management charity or even to family and friends for assistance. First and foremost, you need to inform your payday loan lender as soon as you can to let them know of your change in circumstances. The earlier you can inform your lender, a charity, or family of your inability to repay your loan or loan amount then the quicker the situation can be resolved and the sooner you will be able to get yourself back on your feet whilst also meeting your debt obligations.
Get In Touch With Your Lender
To get in touch with your loan lender you can usually use their customer service line or the telephone number that is listed on their website. You should then, once you have reached the relevant department, inform the lender/their representative that you are having extreme difficulty repaying your loan. They will be equipped and/or trained to offer you assistance, though be advised, you will have to provide evidence of your financial hardship either by way of bank statements or something similar.
Once the lender is satisfied that you are unable to pay back your loan and that you are at risk of incurring further debt and therefore experiencing greater financial hardship (and/or defaulting on the loan), then they may proceed to working with you in order to set up a repayment plan that is of benefit to both parties. The exact methods that a lender will use to assist the loanee will vary but rest assured they will always try to help you in repaying your loan once they have made certain that you are unable to make your repayments. If you have accrued any late payment fees or default fees as a result of your inability to meet your obligations then these will almost always be included in any repayment plan that you set up with the lender.
Reach Out To A Free Debt Adviser
If you are experiencing extreme difficulty meeting your repayment obligations and this is causing you a great deal of stress and/or worry and/or anxiety then we would always recommend that you reach out and make use of the many free services/charities who have been set up with the sole intention of providing you with actionable help and advice when you can’t repay your payday loan. The staff who work at these organisations are trained to provide you with impartial and industry-specific advice, which may or may not include tips regarding budgeting and general finance management. You can usually contact them via telephone, email, or live chat. Examples of these charities/not-for-profits organisations are:
- National Debtline
- Citizens Advice (England, Wales, Scotland, Northern Ireland)
There are more organisations out there and some are tailored specifically for those with issues around mental health. Always do your research to find the charity that is best suited to your needs and to your circumstances.
The Pros And Cons Of Rolling Over Your Loan
If your lender offers you the option of rolling over your payday loan, as well as all associated repayments, default fees etc, to the following month, or even for two months, then you should consider the pros and cons of this option carefully. For those of you who are not aware, rolling over your loan and repayments, et al involves, for example, delaying one months’ worth of payments, (essentially going a month without paying anything) and then on the second month you pay two lots of payments (paying both months in one go).
So Who Could This Option Benefit?
This option would benefit an individual who is able to compile a greater sum of money over a longer period of time. For example, someone who is able to complete more shift work with the sole intent of saving for their loan, over a 2-month period, leaving them with more money at the end of this period than they would have at the end of a 1-month period. Additionally, this would afford a person a great span of time that they can use to seek employment with better pay, and it could also give someone more time to approach family and friends for financial aid, should this be a desired option.
Who Should Avoid This Option?
This option would not benefit a person who is likely to find themselves in an identical position at the end of month two, that they were in at the end of month one. By this, we mean that this person has not got any means of earning larger sums or saving money, owing to financial obligations, are unable to switch jobs etc, and will, by rolling over their loan repayments, simply double the amount they owe, doubling their debt and worsening their financial situation.
As we have previously stated, we would always recommend that you either let us or your chosen payday loan lender know as soon as you are aware of your financial hardship, and your inability to repay your loan. When you can’t repay your loan, you may need to provide evidence to support your situation, however, once this has been provided your lender will work with you to help set up a repayment plan that is manageable and applicable to your situation.