How to Pay Off Multiple Payday Loans

by Mike on April 27, 2013

How to pay off multiple pay day loans

The UK is in the grips of the most significant economic downturn since the 1930s. The banking crash of 2007 has had a profound effect on the millions of hard-working people in the UK who need financial assistance from time to time. Unable to obtain credit or overdrafts from mainstream lenders, an increasing number of British consumers have been left with no other option than to seek credit from payday loan providers.

An unexpected bill or household expense can arise at almost any time, but a combination of stagnant wage levels and rising costs of living means people can’t always put their hands on emergency cash when the unexpected happens. The breakdown of a heating system or an urgent car repair will often require immediate attention, so the chance to access quick cash loans without too much hassle is an attractive proposition for thousands of people in the UK.

In many cases, a payday loan is repaid on time by the borrower without any concern. Unfortunately, most payday loan providers give borrowers the option to defer repayment – this is where many problems begin. As well as a fixed charge, the initial cash advance and subsequent interest charges are subject to further interest accruals. Using the theory of compound interest, it isn’t too long before people start to amass incredibly large amounts of debt.

Faced with few other options, some indebted people turn to other payday loan providers for cash in order to repay existing loans. This unsustainable course of action only serves to delay the inevitable – massive debts that simply cannot be repaid. If you are at this stage, professional help with debt can be as simple as asking for help. A debt specialist will take a number of steps to ensure you can finally start to take control of your own finances; instead of them taking control of you!


A debt specialist will work with an indebted client to ascertain a true picture of personal finances. In many cases, a budget calculator will be used in order to list all essential outgoings and income – the ultimate goal of this process is to formulate an accurate figure of disposable income.


The next step a debt specialist might take could involve negotiation with all of the creditors involved. Most negotiations will begin with a request to freeze interest charges; although creditors are under no legal obligation to do this, an experienced debt advisor will have a far better chance of securing an agreement of this nature than the debtor. Freezing interest gives all parties a finite debt amount to work with – essential in negotiating new, affordable monthly repayments. At this stage, sustainable repayments can be agreed on an informal basis. Where such an agreement is impossible, other options will need to be explored.

Legal Options

Where no mutually acceptable repayment schedule can be agreed, an Individual Voluntary Agreement (IVA) might be possible -but only in situations where more than £15,000 is owed to two or more creditors. Repayments are set at a rate which is affordable for a fixed period, and any remaining debt at the end of the agreed schedule is usually written off. In exceptional circumstances, it may be possible to apply for a Debt Reduction Order (DRO). Referred to by some debt specialists as a ‘mini bankruptcy’, this course of action will mean creditors need the court’s permission to claim money from the debtor; it will also mean debts are written off after twelve months. Of course, bankruptcy is the ultimate solution to payday loan debt problems, but a debt advisor will only recommend it if all other options have been explored.

The spectre of payday loan debt hangs over the heads hundreds of thousands of people in the UK. Some people may be successful in obtaining debt consolidation loans, but the chances of this are remote in the current economic climate. Help with payday loans from an expert can take away much of the distress and worry that people live with on a daily basis. Putting your debt problems into the hands of an experienced advisor could be the first step to a debt-free future.


Company Profile:

1st Point Debt Solutions offers debt management solutions to help you resolve your debt problems.  If you require help on your payday loan debt, please visit –

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