Payday Loans to Debt Free

Firstly, not writing this to get any attention for myself, but want to share after the recent Wonga news and hearing the statistics about spiraling debts.

If you feel TL:DR - Moral of the post, think of the alternatives rather than having the uphill battle of trying to get back to £0 from the Negatives

I’m 29 now, and fast approaching 30, with the mission of being 100% debt free, including all my student finance debts. I’m well on course to reaching this but I haven’t enjoyed the process, and would want to say all of this to make someone else not make the same mistakes.

Payday Loans, the easiest way to get into the biggest regrettable and avoidable debt. I recently worked out I have paid over £18,800 in interest to them over the past 8 years… actually makes me feel so ashamed at the number! That’s a brand new “decent” car or a hefty house deposit !

Alongside this, I gambled away well in excess of £50,000 during the same time frame, I have lived the blind sighted “joys” of addiction from the habit I regret the most.

I’ve always been in employment and been the guy who works every overtime hour given, all to keep normality as I fought to keep up paying the scarily high value in interest you soon saw grow by the day when you had over £2,000 in payday loans from multiple lenders at once.

Big smiles to everyone was the way to hide it, buying lunch from shops at work rather than making my own dinners (had to keep up the appearance of doing well!) and appearing to live beyond means to keep up the “secret” debt.

A few years ago, I turned a corner with the debts and stopped borrowing unless needed. I had a few steps back at the end of last year when I borrowed again, but luckily I got them settled a lot quicker than the past. Along with finally (with added help from Monzo Gambling Block) I pretty much got rid of my gambling addiction ! I will always be a gambler, once you’ve fell into it, you will always be affected, you just have to put steps in to avoid.

When I started to get debt free it was a bit of life event that made me wake up. My mum passed away sadly, and initially I went a bit extreme, and set 10 challenges in her memory to raise money, from reaching the top of 24 peaks in 24 hours in the Lake District, to learning to do a SOLO skydive. I’m pretty proud to say I completed every challenge set and raised a considerable amount of money in her memory.

Straight after this I started to set the mission, clear my personal debt and repay the remaining £9,000 from my student loan.

I made a list of everything I spent on and did what I called the “skim it challenge” and some of the main ones I remember, and many I still do now:

Travel : I used to get the train to work for £6.20 a day, I switched to getting a weekly bus pass for £15.50 - less crowded, get a seat everyday but had a longer travel time.

Holiday : A ‘luxury’ but something I think is a worthy reward for working so much! I started scanning for last minute deals, and splitting the holiday down rather than package etc

Ditching the Brand : I realised that part of the joy of working in an office where you wear your own clothes is the cost of not wanting to feel self conscious. I realised you can pull off the same look for half the price, if not less, by looking online and thinking twice before adding to cart !

Shelf Down : Supermarket shopping - when you need to, move down a single shelf to the brand down a step, you’ll be shocked at the savings

I could keep on going if you anyone needs any ideas let me know!

Next the snowball approach. Many people will already know this one but make a spreadsheet of every debt and agree a minimum payment with each (be honest to every company about your situation, without complaining, you’ll be shocked at the amount have a duty of care to freeze the interest to let you get it cleared soon). Once you’ve all set with the list, work from higher interest/value and make minimum payments, plus all additional money left after everything has been paid.

6 months on, start the list again and increase all minimum payments by a small amount and pick your highest and start again, paying them the increased amount with left over money.

Just under a year ago I got to point where I realised my student loan was already halved due to overtime and that increasing the repayments has been adding up. I realised that I had agreements to pay off all of my remaining debts within 12 months, it was time to the same with my student loan. Previously, the student loan took a fixed percentage of my salary when I earned over the threshold, means the amount paid could go up and down (due to overtime etc). Instead I requested they stop my salary attachment, and let me pay them 12 equal payments for the remainder.

Alongside all of this I was in a position where I could move into my Dad’s rather than renting my own place, which helped increase the proportion of my income that I could use to clear my debt.

So all in all, if you ever think twice about a payday loan, think about it again, a third time. You can find alternative ways around. It becomes a sliding slope, and the battle to get debt free simply becomes harder and longer.

Everything is cheaper if there’s no added interest. Like I say, only wanting to share this to make others think twice before taking out the way too easily accessible payday loans out there. It ends up being a shameful spiral that you always say you’ll never fall into.

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Awesome post. I haven’t been in your shoes, but I’m sure this could be a massive help to someone who might be going through something similar. Kudos for putting it up and sharing your story.

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I’m not an expert but shouldn’t someone who takes out that many payday loans raise some sort of flag?

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Its a self declared income and expenditure and as long as no negatives they offer small at first then increase for “loyality”.

Worst was one that brands it’s self as overdraft alternative, 48 deposits from them, they get access to your bank and auto top up when you drop below £50! (Won’t post company name)

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I’d never heard of that being a thing :exploding_head:

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Amazing post and I like the numerous posts you’ve made on here talking about your personal situation and encouraging others to avoid making similar mistakes. Your feedback about the gambling blocker are still some of my fave posts on here, it’s nice hearing from other peoples’ perspectives. Always a good thing when a feature Monzo has put in has genuinely helped change someone’s life for the better!

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Great post. I think it’s very good for people to be open about “secrets” like payday loan debt. It’s the shame and secrecy that makes everything worse in my experience!

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I’ve never been in that situation, but from what I know it’s very hard to get yourself out.

Congratulations on turning it around like that!

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To Danny!

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I thankfully never got myself to a point where i was relying on payday loans to keep me going but i still relate to this a lot.

16 year old me got a relatively good paying job for my age and went a little crazy with the spending, and there was a good few years of only finishing the month with £20 in the bank if i was lucky. I have been cleaning up a lot of the finance i have taken over those years and I’m noticing a big difference and of course if i could go back i would be a lot more careful. I just wish people could understand more how much that £2000 borrow will actually set you back.

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Wow , really happy for you that you’re nearly sorted, you definitely deserve that holiday.

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I think this is a great post mate. Such self-realisation is very important and we should have more stories like that! That is what the money is all about!

I also ditched buying things I don’t need long time ago, dispense with luxuries, never needed a car. My minimalistic life made me realise I prefer to save money and spend it to travel to see my friends/family, buy them dinner, or a small gift.

My first loan I took in the UK was in 2008 I believe 5500 GBP and I had to repay about 9000 as I had PPI, which I did get back in the end even though I wasn’t aware of it (one day I just got one cheque and then another)… I paid it in 2011 and I said NEVER AGAIN.

My family has always been in debt since my dad’s accident, that’s why I left my country to pay it off, but the struggle my dad has had over the past 15 years to pay it all off taught me to try to keep away from a situation I would ever need one. My dad didn’t have much of a choice but I’m trying to make sure I always do!

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Thank you all for the replies! Just thought was right moment to share and try shift a bit away from the secrecy everyone thinks they need to keep about these topics :slight_smile:

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fantastic, well done to keeping to your targets :slight_smile:

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Great post buddy and well done

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Thank you for this post. So important to share full stories!

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Some of your story rings a bell for me :tired_face: - great tip about contacting the lenders and talking about reducing the interest rate!!! Chers

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Your post is really inspiring. I’m working my way through a similar process. I’m set myself 2 and bit years (until I reach 40) to pay back £25K

It’s really good to know there’s light at the end of that particular tunnel

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Great post and congratulations.

I had a similar journey, I had a call centre job when I was 17 earning peanuts. Started out with the financed car. Then I wanted to fit in so had to have the cool clothes. Long story short, I had maxed out 2 credit cards, 3 store cards a bank loan, car finance and 5k on an IT course …(I know, and it was a rip off, won’t name the company) and had more going out than I did coming in. I was about 30k in debt
It got me into a dark place with the worry and was only earning 12k a year.
The bank threw me a life line to get a consolidation loan BUT at a huge amount of interest 21.9% over 8 years. I didn’t mind at the time as I didn’t really understand the impact. I managed to get a better paying job at 27k as a developer but only seen me “upgrade” my car and go into more debt. 5 years into the loan I got my act together and started to not care about what people thought of me and material possessions (people judge). I found a chap called Dave Ramsey on YouTube and he made so much sense. I cut up my cards and started staying in more. I made a plan to bank everything I could and make my own lunches. It took over a year and I had to hand my car back and cycle instead but I got there.
I’m proud to say that I’m debt free (minus mortgage) and pulling down a healthy salary in my new manager job and I get to bank 70% of my salary every month into savings and it feels great. Totally opposite position to how I was. Now plan to pay off mortgage within 5 years and it’s totally achievable.

There are some things to think about though …

I would say that borrowing has its place if done sensibly. Life is short and money has to be enjoyed as well as saved. It’s all about the balance. I adopted a minimalist lifestyle and have emergency savings of over 12 months in the bank covering mortgage and bills. Just make sure you have a plan to spend money too and enjoy your success sensibly.

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Couldn’t agree more on this, often giving things a second thought rather than rushing in. Well done on your own journey and congrats getting debt free !!

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