Loans

Loans come in many forms – from personal loans and car finance to payday loans and guarantor loans. If you're struggling to keep up with loan repayments, it's important to understand your options and act before the situation gets worse.

There are several types of loans you might have:

Personal loans - Borrowed from a bank or building society, usually repaid over 1-7 years with fixed monthly payments.

Payday loans - Short-term, high-interest loans designed to tide you over until payday. These often have very high APRs.

Guarantor loans - A loan where someone else agrees to pay if you can't. This puts them at risk too.

Logbook loans - Secured against your vehicle. You could lose your car if you don't pay.

Doorstep loans - High-cost loans collected weekly at your door.

Credit union loans - Lower-cost loans from not-for-profit lenders.

You might be heading for trouble if:

• You're taking out new loans to pay off old ones
• You can only afford minimum payments
• You're missing payments or paying late
• Loan repayments take up most of your income
• You're using loans for everyday essentials
• You're being contacted by debt collectors

If any of these apply, it's time to get help.

If you're having difficulty with loan repayments:

1. Contact your lender - Explain your situation. They may offer a payment holiday, reduced payments, or freeze interest.

2. Prioritise your debts - Loans are usually non-priority debts, but secured loans (like logbook loans) need urgent attention.

3. Don't borrow more - Taking out new loans to pay old ones makes things worse.

4. Check for unfair lending - If a lender didn't check you could afford the loan, you might be able to complain.

5. Get free advice - A debt adviser can help you understand all your options.

Payday loans can quickly spiral out of control. If you're struggling:

• The lender must freeze interest and charges if you're in genuine difficulty
• You can ask for a payment plan based on what you can afford
• If the lender didn't check you could afford the loan, you may be able to get a refund
• You can complain to the Financial Ombudsman if treated unfairly

Many people have successfully claimed refunds from payday lenders who lent irresponsibly.

When dealing with loan debt, remember:

• Lenders must treat you fairly, especially if you're vulnerable
• They should freeze interest if you're in financial difficulty
• They cannot harass you or use threatening behaviour
• They must consider reasonable payment offers
• You can complain to the Financial Ombudsman
• After 6 years, unsecured loan debt may become unenforceable (though this affects your credit file)

Loan debt can feel overwhelming, but there are solutions. Our advisers can:

• Review all your loans and debts
• Check if any loans were mis-sold
• Negotiate with lenders on your behalf
• Recommend the best debt solution for your situation

Contact us today for free, confidential advice.