4 min read

How CLEVR saved me from payday loan hell

A 29-year-old father of one who got into a spiral of debt with a payday loan from an online lender.

I took out a small loan for £100 and paid it back almost straight away. I can’t honestly remember what it was for now, it was probably just to tide us over for a few weeks until pay day. Every couple of months the loan company would get in touch and offer us a new loan but for a bit more each time, usually £40. First it was £140 then £180 was offered, and on it went. We just kept saying yes, why wouldn’t you? To start with we were paying it back pretty much straight away. But then the amount we were paying back just kept getting bigger, I guess that’s as the interest increased as we took more out.

Over the next year we got up to borrowing about £750 a month, there was another £160 per month in interest, and they wanted it all every month. Obviously that’s money we didn’t have spare so we were basically paying it out of our wages and then immediately having to get another loan to pay for everything else like rent and food for the month. It wasn’t so bad while there were two wages to live on but, after my partner and I split up, I couldn’t cover it on just my salary of £900 a month.

The worst thing was that they took the money straight away as soon as I got paid because, as it was a payday loan, they had access to our bank account. I got paid on the 30th and the money was pretty much all gone on the first, so I’d have no choice but to get a new loan. No one can believe I signed up to something like that, but I had no idea that’s what would happen. It must have been in the terms and conditions I suppose, and I don’t think we realised how much it would matter when we were only borrowing £100. Paying back the whole lot every month was crippling, and I had no control over it. If there had been proper payment plan I could have paid off a bit but kept some money to cover living expenses for the month and try and get myself out of the debt. But because they took everything, I had no choice but to get another loan every month. Even when I did overtime, that extra wage was simply paying for the interest, I wasn’t able to get to a point where I had enough spare to get myself out of it.

The stress of the whole thing was awful.

My partner and I had split up and I was trying to cover my costs, pay for my daughter, and pay off this debt. I really didn’t know what to do, for two years I just thought ‘this is my life now’. A family member heard about the credit union through work and set up an appointment. I was sceptical and thought they’d listen to my story and then fob me off with excuses about why they couldn’t help people like me, like the banks did. I could not have been more wrong. Within a week they had everything sorted out, I can’t tell you what a relief it was. They gave me a new loan for £900 which paid off the old loan, we closed the account and that was me free of them. It really was that easy ! With the credit union loan I pay back £79 per month over 14 months, that’ll be a total interest of £216 for just over a year, rather than £160 per month. Because the repayment is so low, I’ll keep most of my wages so I won’t need to get a new loan every month to pay my bills. I can’t tell you how fantastic it is to see my wages in my account, and to know it’s my own money I’m spending, and it’s not costing me hundreds of pounds. I have actually chosen to put £100 a month into my credit union account, which covers the monthly repayment and puts a little extra into a savings account so I’ve got a nest egg for when something comes up. I’ve never saved anything in my life before, so it’s amazing seeing that figure go up every month. I’ve never been great with money I’ll admit. The banks don’t want to know with people like me, I just don’t earn enough for them to be interested and my credit rating isn’t brilliant. So then there’s the payday lenders and these internet companies who are really just there to take your money and get you stuck with them so you owe them more and more every month. I feel sick thinking how much money I have wasted over the last two years with that company, and how I would still be stuck if I hadn’t come to CLEVR Money. My life is honestly so much better now, I have control of my own money and I can even pay for things like a little family holiday to Wales this summer with my partner and our daughter. CLEVR Money has changed my life. They can change yours as well.