Payday loans are short-term loans for small amounts of money, often marketed as being fast and easy solutions when times are tight. Usually, payday loan lenders place huge emphasis in their advertising on the speed and ease with you can get your hands on the cash. Rarely do they emphasis the risks – so read this guide on BEFORE you take out a payday loan.
Payday loans are available from many internet sites and high street shops. They are easy to obtain but usually involve interest rates that are amongst the highest amongst lenders. You should always consider alternatives before you borrow. If do decide to borrow from a payday loan company you always shop around beforehand to get the best rates. Make sure you understand what will happen if you are unable to pay it back on time - the penalties should be pointed out clearly by the lender in advance.
If you are unable to pay back the loan on time the lender may be willing to defer or delay the repayment. This is known as an extension. Be aware that extending the loan will result in you paying more interest and may involve having to pay additional fees. When this happens, the total amount that you will end up having to repay will be much, much higher than the amount you originally borrowed. Many borrowers of payday loans have experienced spiralling debts that quickly become uncontrollable – don’t fall victim to debt!
If you are struggling to pay back your debt you should seek independent legal advice. Seek out your local Citizens Advice Bureau, or visit Advice guide for further help.
If you have a complaint about the way you have been treated by a payday loan company you should try to resolve it with them in the first instance. Most companies have pledged to observe the industry’s good practice charter. If you feel they have not, or are not satisfied with the company despite complaining, you should contact the Financial Ombudsman Service.