My Payday Loan Nightmare – Shannon’s Story

In 2017, Shannon found herself in great financial difficulty after the break up of her relationship. With three young children to care for and a sudden decrease in household income, Shannon found it increasingly difficult to make ends meet. 

“John and I had been together for a good few years and he had always been the main breadwinner. When he left out of the blue, I was alone with three young kids and a low wage. Once I had paid out for childcare so that I was able to work, the money I had left was only enough to cover the bills and essentials. With three kids to feed and no family around me to turn to for help, I was really struggling. I tried to budget the best I could and every Sunday night I’d sit and plan out the meals for the week, aiming to keep the cost as low as possible. Living on a low budget is really hard and I felt guilty for having to say no when the kids wanted a new game or a day out with their mates. I just couldn’t afford anything extra. There was no more money.”

With the cost of living on the increase and wages being at a standstill for a number of years, many people are struggling financially. As a result, they are turning to high-interest loans to pay for things such as unexpected bills and household repairs.

“I’d already been struggling for months when things took a turn for the worse. First, the washer/dryer packed in and I had no money to call out an engineer let alone replace it. I was hand-washing uniforms in the bath but had nowhere to dry them quickly. It was the middle of October and too wet to hang it outside. To dry it inside I would need to have the central heating on and that was a luxury I couldn’t afford. Not long after the washer broke down, my eldest came home from school with a letter about a residential school trip. The year before she’d had problems with bullying and after a great deal of stress and upset we managed to get it sorted and she made new friends. She was worried that if she didn’t go on the trip with her mates that they might realise it was because her Mummy couldn’t afford it and the bullying would start again. This was beyond heartbreaking for me and I was desperate for her to be able to go. She’d had a really rough year and deserved a treat but at almost £300, I just couldn’t afford it. At that time, even if it had been £20, I would have struggled to find the spare cash.” 

“Whilst browsing the internet, I stumbled across an advert offering short term loans. It said that I could have cash in my account on the same day. I knew that I couldn’t afford to get the washing machine repaired and pay for my daughter’s school trip. Borrowing cash to pay for both seemed like my only option so I phoned the number on the advert. My application was successful and I had £500 in my account by the end of the day. I could get the washer fixed and tell my eldest she could go away with her friends. Perfect!”

Payday loans and guarantor loans come with extraordinarily high interest rates. Many, like Shannon, fail to read the small print or understand what the financial jargon actually means. For most, being able to access a reasonably large sum of money in a short space of time, is their primary concern. Whether or not the repayment can be made on time is often something they put to the back of their minds and choose to worry about at a later date. However, when someone is borrowing money because their current income doesn’t allow them to afford unexpected extras, then it is highly unlikely that they will be able to pay back the loan amount without falling into financial difficulty again. Taking out a payday loan, often makes their situation worse, as Shannon soon discovered….

“I had the washing machine repaired and my daughter had a great time on her school trip. I was so relieved to have been able to sort both of those things that I barely thought about what would happen when the repayment was due. I had a text reminder a couple of days before my payday that the payment was due however they were asking for payment in full plus interest!  I looked in to the information I had received when I took out the loan to see if this was correct and realised I hadn’t read the small print properly and the full loan amount was due. There was no way I could afford the repayment. If I paid it all back out of my wage, there would be barely enough left to cover the rent, never mind anything else.  How would I feed my kids? How would I afford gas and electricity?  There was no way I could pay it back out of my next wage. However, my ex had recently got back in touch and promised me that he would start sending me money the next month. Under the impression that I’d have more money the following month, I decided to take out another loan to repay the amount I had borrowed plus interest. I’d have a few more weeks to worry about it and with my ex’s money, repayments would be manageable.”

Unfortunately for Shannon, her financial situation did not improve. She paid off the initial loan but the second loan was for a higher amount to cover the interest on the first. She again found herself unable to make the repayment and like many others across the UK, was soon trapped in a cycle of debt, borrowing money to pay off loans she had taken out the previous month. Each month her total debt amount increased as the interest was added.

Thankfully, Shannon found a company online offering FREE debt advice and after chatting to a Debt Adviser managed to break the cycle and start paying only what she could afford. Not only did Shannon no longer have to deal directly with the loan companies, affordable monthly payments were also negotiated on her behalf. Shannon no longer had to worry about finding the total debt amount in one go and she didn’t need to take out another loan. 

“I don’t know what I would have done without this arrangement. The lady on the phone who gave me my free debt review was so friendly and understanding. She explained that she had been in a similar situation and told me in detail about all the options available to me. By the following day, we had worked out my exact income and expenditure and agreed on a monthly repayment amount that wouldn’t leave me unable to pay my essential bills or feed my family. I no longer had to worry about where the money would come from and I would actually start to see the amount I owed go down instead of up each month. I cannot thank them enough for all their help. It’s so nice to be able to sleep at night instead of lying awake worrying about debt.”

Are you struggling with debt? Are you unable to make the repayments on unsecured debts like payday loans, credit card, store cards, catalogues, car finance, and even council tax arrears and benefits over payments?

UK company, Debt Information Service offer an entirely FREE debt review. A qualified Debt Adviser will listen carefully to your situation and then advise you of all your available options. There’s no pressure and you are under no obligation to enter into a plan. If you choose to go ahead with a debt solution, you could have peace of mind in under 24 hours. You could even have up to 75% of your total debt written off completely and reduce your contractual monthly payments by 50%.