The recent recession drove many families into financial difficulty. In order to make ends meet, many were forced to take out short-term, high-interest loans which they then found they just couldn’t pay back. It may seem like, since you owe the company money, there is little help open to you if you cannot pay it back. In fact, if you are in difficult circumstances and the company seems unsympathetic, there are a number of things you can do to try and improve your situation.
Obviously, the main problem with being chased for payday loan repayments you can’t afford is that you are faced with a debt that just keeps mounting up. Not only are you supposed to be paying back this money yet unable to do it, but the high interest rates mean that the debt keeps getting bigger. The problem of paying it back, therefore, seems even more impossible to overcome as time goes on. If you are able to pay back anything, you might find you are barely covering the interest and not even touching the original debt.
On top of this, many people in this situation report that they have experienced overbearing, even bullying tactics from the payday lenders. Excessive contact on home, work and mobile phone numbers along with emails and texts is a common problem. Often, this contains threat-like information about the action they may take if they do not receive their money.
Dealing With These Issues
It is true that you owe these people money. However, this does not give them licence to use whatever tactic they please to retrieve the money. You still have some rights, and there are still laws restricting the lenders. Many of the tactics people struggling with payday loan debts claim to have experienced fall outside these boundaries.
If you are in a difficult financial situation and are unable to reasonably make payments, the payday lender should take this into account. It is a good idea to write to them explaining your situation and proposing a solution such as a more reasonable repayment rate. However, this can seem difficult, and some people have reported that attempts to do so have been simply ignored. For this reason, you might want to use some of the free templates available online. These are customisable letters in the correct format, and they usually encourage lenders to comply by reminding them of your legal rights and the action you can take if those rights are breached. These letters can result in more manageable repayments and sometimes in interest being reduced or frozen, especially if the lender did not take adequate steps to ensure you could repay the loan when they authorised it. Often, this will also serve to stop excessive contact.
If you believe you may be being overcharged for your loan, you should also send a letter requesting they prove the debt to you. If you are correct, they will have to reduce the debt to the appropriate level, and if you are mistaken at least you will know that you are not overpaying.
If you believe the lender you owe money to is operating illegally, it is important you report them to the authorities.