Responsible Borrowing : Payday Loans pt.2

We live in constant contact with money and when we are always surrounded in temptation to buy it can be difficult to distinguish the different between needing and wanting a Payday Loan

What is the difference between wanting and needing a Payday Loan?

Payday loans are short-term loans designed to offer small amounts of money to be paid back, typically over one or two months. Here at, we fully understand that it is no surprise that life throws financial problems that can lead to unexpected expense that your budget doesn’t cover. These emergencies may be replacing your boiler, vehicle breakdowns or even media expenses to name a few.

On the other hand there has been a growing trend of people using Payday Loans to cover everyday expenses perhaps the lines between wanting and needing have blurred too much in our current society. Others have used Payday Loans on luxury experiences or items which should be discouraged, as it makes it easier to fall into debt and lose control of your finances.

What happens if you don’t pay on time or not at all?

A number of payday loan borrowers struggle to pay off their loans and the idea of being in debt can be a scary thing. If the repayment date looms or if you have already missed your repayment date and you can’t afford to repay it all – don’t panic! You’re not alone.

Acknowledge the credit consequences: If you are thinking of defaulting on your payday loan and don’t arrange an alternative payment plan with the lender, you can expect your credit score to take a hit.
Expect to pay extra interests and charges: The longer you go without paying your payday loan, the more you will owe the lender. Extra charges may come in the form of late payment fees and interests on your arrears.

For example:
If you borrow £100, over 30 days, this would cost you £24 in interest due to our fixed interest rate at 292%pa, essentially 80p per day (RAPR: 1,225.5%). Therefore making your total balance to be £124 at the end of those 30 days

If you don’t pay payback your loan, you will incur a default fee of £15 and you will enter into arrears. If you still don’t pay after 15 days in arrears your total balance would be £151, incurring a total charge of £51 of the original amount (£100) that you took out. (RAPR: 1,225.5%)

If you still don’t pay after 30 days in arrears your total balance would be £163, incurring a total charge of £63, an interest of 48% on the original amount (£100) that you took out.(RAPR: 1,225.5%)

If you still don’t pay after 60 days (2 months) in arrears your total balance would be £187, which would have incurred a total charge of £87, an interest of 72% on the original amount (£100) that you took out. (RAPR: 1,225.5%)

How to avoid getting further into debt?

Don’t take out another loan to repay another loan debt. This is a trap that people often fall into, it’s not being able to afford the loan in the first place, but the feeling that there’s no way out other than to take out another loan and another . . . then another.

Depending on how much you owe the payday lender and if your situation allows, you may still be able to pay off your loan quickly or in full by making some financial adjustments

If you have borrowed from us, we prefer that you negotiate directly with us rather than avoid us, as it is important to keep an open channel of communication – would like to help our customers as much as possible

If you’re struggling with a number of debts and need help, it’s worth speaking to free debt advice organisations like National Debtline or Stepchange, who will help you to find the right debt solution for your personal circumstances and may help you negotiate new or reduced payment terms with your payday lender. Don’t use a commercial debt-management company as there are plenty of free, independent debt advice

How can help you?

At, we are here to help as we practice responsible lending to all our customers by making sure that our applicants are over the age of 18, are employed and earning a minimum income of £600 per month with a valid UK Bank account. We also contact our customers 3 days prior their repayment date via different methods to give them the best chance of letting us know if they can’t pay back their loans or are having any issues. We also abide and keep up to date with all rules and regulations made by the FCA, a financial regulatory body in the UK.