A guide to repaying payday loans when made redundant
Losing a job can be one of the most traumatic experiences a person can go through. It can have a significant impact on your mental and physical wellbeing as well as that of your family.
Given the tough economic times we live in, the prospect of being made redundant is something that many people are understandaly worried about.
How will you meet your mortgage repayments? How will you put food on the table? How will you cover your day-to-day living costs? These are all questions that people ask when confronted with the prospect of unemployment.
Another question some people have had to ask themselves in recent times is how they will repay their payday loan when they have no money coming in?
The first point to note is that if you are unemployed, payday loans are something you should avoid. They are short-term loans designed for short-term problems and if you have no job, you can find yourself slipping into a debt spiral.
Responsible payday loan companies will not lend to those with no job, however, some firms are more reputable than others, so it is something you need to be aware of.
However, what if you took out a payday loan and lost your job a few days later? While some will have savings in place to meet the repayment date, other people have no financial cushion to rely on, which is where problems can arise.
It may seem that there is no way forward, however, there are various steps you can take.
The following is a quote given to the BBC by Richard Griffiths from the Consumer Finance Association:
“If a customer finds their situation changes and they are struggling to meet their commitments they should always seek help.”
But what help is available?
There are numerous debt charities in the UK and every year they help millions of people who cannot meet their financial obligations.
These include the Consumer Credit Counselling Service, National Debtline and the Money Advice Service.
All of these charities offer free advice, so you do not need to worry about whether or not you can afford it.
One of the most common criticisms levelled at payday loan providers in previous years is that they are unreceptive to borrowers who for one reason or another are not in a position to repay their loan by the agreed date.
However, the majority of lenders have signed up to the CFA’s new customer charter, which stipulates that members must provide assistance to those struggling to repay their debts.
You should therefore speak to your lender at the earliest opportunity and explain the situation to them.
You should not, under any circumstances, try and run away from the problem. If you fail to address it, the debt will snowball, meaning you will have much more to repay than you would were you to tackle the issue head on.
Unemployment brings with it so many stresses that you may feel your world is caving in. Finding a job in the current climate is difficult and with debts to meet, you may feel like you have no escape.
While it is undoubtedly a difficult position to find yourself in, there are options on the table and the earlier you tackle the problem, the better for everyone.