With ever increasing living costs and ever stagnant wages, the cost of living is becoming a daily worry for many people across the UK. So many are currently turning to pay day loans in order to get through the month.
With companies such as Quick Quid, Amigo Loans and of course the most recognisable, Wonga using their bright, focussed advertising (www.youtube.com/watch?v=t7JT2enNi3A) to tell you how simple it is to get yourself that extra cash that you may need and how easy it is to pay back. But paying back this Wonga loan is not that simple.
In a world where you can apply for a loan 24/7, falling into a bad pay day loan is simple to do. After reading through a variety of forum posts, I have spotted a common theme. Most people take the Wonga loan out when they’re extremely short of cash that month, not when they need to just simply top their account up. After applying for the Wonga loan (more than likely the maximum amount, not the average £260 as the stats say) the plaster is applied over the cash wound temporarily, until it comes to the end of the month when the same situation is faced and the vicious circle starts again. One customer I was reading about was paying out more to Wonga than what she made each month and had to borrow more on top of that loan just to get through until the next payday. Clearly this is no way to live and whereas it’s accepted that many have had to turn to pay day loans such as Wonga to survive.
So if you did get into that situation, how can you get yourself out of the credit trap and make sure that you don’t have to go through it all again?
The first thing to do is acknowledge that you can’t make the repayment. Everyone gets paranoid and doesn’t want to ruin their credit profile, but papering over the cracks will only make the matters worse and lead to a debt spiral. First contact Wonga and let them know that you are running into financial difficulty. Wonga can be contacted via the number on this site and they are obliged to help you. Explaining your situation in honest terms and then showing them your income and expenditure is the preferred method of any credit company helping you pay off your debt. Ask them to freeze the interest on your account. This is one of the first and best steps to help you reduce your debt. Ask them to freeze the interest and offer a sensible amount to repay. Most companies will accept this with all the evidence and it’ll help you pay your debt faster. Again be aware, if Wonga or any other creditor refuses your offer, they can take further action. If your circumstances have changed then inform the creditor immediately.
Secondly budget properly. Make sure that you budget your incomings and outgoings properly. Create a budget sheet at home. List all your income from work and other sources and work out how much you’re spending each month on everything. Reduce your outgoings by ditching non-essential items and showing this to creditors will make them more inclined to help you.
Thirdly contact a debt advice service. There are many different ones around right now such as Step Change (www.stepchange.org) or the National Debtline, (www.nationaldebtline.co.uk). You can also make an appointment at your local Citizens Advice centre (www.adviceguide.org.uk) for more impartial advice.
Be aware that Wonga or any of the other pay day loan services can sell bad debt to collection agencies at any point during your time in arrears. If they do this, then you will be dealing with a collection agency rather than Wonga themselves. The company may have sold your loan in its entirety to the company and it will be them you will owe, not Wonga anymore or they will have sold it to them so they can collect it on their behalf. When the letters arrive, don’t ignore them respond to them and you will find that the companies can actually be good to deal with and willing to help. Show that you can pay something, give them a budget and they will help. A threat of court action is very unlikely unless you constantly ignore them. If you can agree a new debt plan then even better, but be aware they may try to collect in full.
Check your credit profile too. Experian and CheckMyFile both have 30-day free trials with no obligation to continue and with this you can control your credit rating and also help find further detail.
The first steps to dealing with debt and pay day loans especially after feeling like you HAD to take one out are difficult, but with a cool head and calm sensibility, you’ll get through it. Contact Wonga through this site and begin your journey to being rid of that pay day loan.