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Payday loan debt. Expert help and advice.

Payday loans are short term loans designed to cover essential costs until your next payday. If you're struggling with debt problems, payday loans aren't the answer.

They've been around for a long time, but have become extremely common in the last few years.

Read our payday loan guide for more information, including a calculator to help you work out the true cost of short term borrowing.

The cost of payday loans

Payday loans usually have extremely high interest rates and if you don't pay the loan back on the date it’s due the lender will add extra interest or charges to your account. There are cheaper and less risky alternatives to payday loans.


Repaying a payday loan

When you apply for a payday loan, the lender will normally take your debit card details so they can take the full loan payment out of your account on the due date. When you give the lender your card details you're authorising them to take regular, or continuous, payments.

If there isn't enough money in your account to repay the loan the lender can try to take the payment again. They can only try this twice, unless you've agreed to extend the loan.

If you don't have enough money to pay back the payday loan and cover all your essential living costs, you should cancel the debit card continuous payments. You can do this by asking your bank or the payday lender to stop taking the payments. They have to follow your instructions, and if they don't you can make a complaint and get any unauthorised payments refunded.

Payday loan debt problems

Payday loans might seem like a useful quick fix to a cash-flow problem, but if you can’t afford to pay the loan back on time, it could spiral into a much bigger problem.

Once you've repaid the loan, you might not have enough money to last until your next pay day. When this happens, it can seem like a good idea to take out another payday loan. You can soon become reliant on them and your financial situation will become difficult to deal with.

How we can help

Taking out expensive types of credit like payday loans can be a warning sign that you're getting into problem debt.

If you're considering taking out a payday loan, or if you're struggling to pay one back, we can give you free and impartial debt advice.

Use our online debt advice tool, or call our Helpline on 0800 138 1111 (free from all landlines and mobiles).

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They were a pillar of support to me.” (Leslie, Essex)

Foundation for Credit Counselling Wade House, Merrion Centre, Leeds, LS2 8NG trading as StepChange Debt Charity and StepChange Debt Charity Scotland. A registered charity no.1016630 and SC046263. It is a limited company registered in England and Wales (company no:2757055). Authorised and regulated by the Financial Conduct Authority.

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