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At a glance: Things you can do to manage payday loan debt.
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This summary is not relevant in England and Wales
For a version of this summary that covers England and Wales, please click here.

What are payday loans?

Payday loans are cash loans, normally paid into your bank account. They are called payday loans as they are meant to be loans that you pay back when you next get your wages or benefits. 

It is easy to lose control of the debt as interest rates are usually very high.  

What can I do if I cannot pay back my payday loan?

If you are finding it hard to pay, think carefully before borrowing again. It will only help if you can afford to pay more next month. 

Loan rollover 
Some payday loan companies offer a loan ‘rollover’. This gives you another month to pay. It may seem like a good idea if you are struggling to pay. However, it usually means you pay more interest and charges, so you will owe more than you did before. 

Only consider a rollover if you are sure you will be able to clear the loan in full the following month.  

How to stop a payment 
The action you can take to stop money being taken depends on the repayment method you agreed with the payday loan company: 

  • Continuous payment authority (CPA).  
    A CPA is when you give the payday loan company your debit or credit card details, which they use to take payments. If you have a CPA you can take action to stop the payment being taken. We have information on stopping a CPA in our guide to payday loans. 
  • Direct debit  
    You can tell your bank to stop a direct debit.  
  • Standing order  

You can tell your bank to cancel a standing order. The latest you can do this is usually the working day before the payment is due. 

Other ways to get help

There are many things you can do instead of taking out a payday loan:  

  • If you claim benefits but have not been paid, you may be able to apply for a short-term advance from the Department for Work and Pensions. 
  • You can apply for government help with funeral or maternity costs, and cold weather and winter fuel payments. Sometimes you can ask for budgeting loans. If you are on Universal Credit, you can apply for a budgeting advance instead of a loan.  
  • Local credit unions might give you a loan. Usually, they give loans if you have saved with them first. This type of loan would normally be at a lower interest rate than a payday loan. 
  • If you need food, furniture or white goods, see if there is a food bank or recycling project near you.  

Learn more about this topic

If you want to learn more about this topic, you can read our in-depth guide.

Read in-depth-guide

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