What if I can not afford my payday loan payment?
If you cannot afford your payday loan payment, its is important that you take action straight away:
- Contact your lender as soon as possible and explain your situation
- Try to agree a new payment arrangement with them that is affordable for you
- Make sure you keep up with the new payment arrangement to avoid any extra fees
- It is important to get help if you are struggling
Your lender should treat you fairly if you are struggling to repay your loan. This may include agreeing a repayment arrangement or allowing you more time to pay.
Do not take out another loan to make the payment. This could make your debts harder to manage.
If you are struggling to pay your payday loan or other bills, get free debt advice to understand your options.
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What happens if I miss a payday loan payment?
Your lender may contact you to ask for payment. They may also add interest or charges, depending on the terms of your loan. This means you have more to repay.
Interest is the amount added on top of what you borrow. Think of it as the 'fee' you have to pay to borrow money. Extra charges can be added if you miss or make late payments. Read more about interest and charges in our useful guide.
If you continue to miss payments, the lender may pass the debt to a debt collection agency or take court action to recover the money.
Read our guide to dealing with county court judgments (CCJs).
If you cannot afford your payment, contact the lender and get free debt advice as soon as possible. You should not take out another loan to cover the payment.
Can I ask a payday lender for more time to pay?
Yes. If you are struggling to make your payday loan payment, you can ask the lender for more time to pay.
Your lender should take your circumstances into account and may be able to agree a repayment plan or give you longer to repay what you owe.
If you are struggling to afford your payments, get free debt advice. We can help you look at your income, spending and debts and understand your options.
Can a payday lender keep taking money from my bank account?
A payday lender may have permission to take payments from your debit or credit card. This is called a continuous payment authority (CPA).
A CPA allows the lender to try to take money from your card on the agreed payment date. If you don't have enough money to make the payment, they may try again.
If you can not afford the payment, you can ask your card provider to cancel the CPA. Cancelling the CPA does not cancel the debt, so you'll still need to agree how to repay what you owe.
If you are worried about money being taken from your bank account, read our guide on a continuous payment authority (CPA)
Can a payday loan company take me to court?
Yes. A payday lender can take court action if you do not repay what you owe.
In England and Wales, this can lead to a County Court Judgment (CCJ). In Scotland, it can lead to a decree.
If you receive a letter or court papers about your payday loan debt, don't ignore them. Get debt advice as soon as possible.
Can you go to jail for not paying back a payday loan?
No. You cannot be sent to prison for not paying a payday loan. Payday loans are a type of consumer credit, and not paying this type of debt does not lead to imprisonment.
You can find out more about consumer credit debts in our useful guide.
If you are struggling to repay a payday loan, getting free debt advice can help you understand your options.
Can I get help if I have more than one payday loan?
Yes. You can get free debt advice if you have more than one payday loan or other debts.
You do not need to deal with each lender on your own. Debt advice can help you look at all your debts, income and spending and work out what you can afford to pay.
Do not take out another payday loan to repay your existing loans. Getting more borrowing can make it harder to manage your debts.
Get free debt advice to understand your options.
How long does a payday loan stay on my credit file?
Information about your payday loan and how you repay it can be recorded on your credit file.
If you miss payments or default on the loan, this can affect your credit rating. A default will normally stay on your credit file for six years from the date of default.
The effect on your credit file can depend on what has happened with the debt and how it has been reported.
Read more about how credit scores work in our useful guide
Can I take out another payday loan to pay off an existing one?
You should not take out another payday loan to pay off an existing payday loan.
Taking out more borrowing can make your debts harder to manage. If you cannot afford your current payday loan payment, get free debt advice instead. We can help you look at your income, spending and debts and understand your options.
Can I complain if I was given a payday loan I couldn't afford?
Yes, in some cases. If you think a lender gave you a payday loan without properly checking whether you could afford to repay it, you can complain to the lender.
The lender should have considered whether the loan was affordable for you when you took it out. If your complaint is upheld, you may be offered a refund or have some interest and charges removed.
If you are unhappy with the lender's response, you may be able to take your complaint to the Financial Ombudsman Service.
Find out more about making complaints about creditors.
Can a payday loan be written off?
A payday loan cannot simply be written off because you are struggling to pay it.
However, some debt solutions can reduce or write off debts depending on your circumstances. The right option will depend on things such as how much you owe, what you can afford to pay and what you own.
If you are struggling to repay a payday loan, getting free debt advice can help you understand your options.