Payday loans can offer a useful way to borrow a small amount of money for a short period. You might have an unexpected bill to pay with days to go before your next paycheck. In such circumstances, a payday loan could be a simple and affordable option for getting hold of the cash you need and fast.

Unfortunately, payday loans are often taken out for the wrong reasons, such as for paying off existing debts if a payment deadline is approaching fast. People can quickly fall into serious debt if they take out new loans to pay off existing ones or have multiple payday loans at the same time. With each payday loan having its repayment date, it’s easy to see how financial management could quickly fly out the window.

In Uk, citizens are no more strangers to debt. Figures show that the majority of us do not pay off our credit card balance in full each month, while a third of us have at least ten different credit cards. Let’s take a look at some of the major reasons why UK citizens get into debt:

1. Loss of income

Expenses are a fact of life. Everyone has regular payments that they have to make, including mortgage/rent payments, utility bills, phone bills, etc., etc. Unfortunately, if our income falls or we lose our job, these expenses stay the same. It’s little wonder that this is one of the key reasons for people slipping into debt.

2. Divorce

Half of the marriages end in divorce. In addition to the emotional fallout from this type of major life event, there are usually financial ramifications, and these can be quite severe. Many marriages involve joint bank accounts and mortgages. And if a couple has children, the financial after-effects of divorce can be sizeable, even if the split itself is amicable and doesn’t incur massive lawyer’s fees.

3. Poor financial management

Some people are simply not good at managing their finances. If a person fails to keep track of their monthly income and outgoings, it’s remarkably easy to fall into debt. And once this has happened, it can be a long hard road back to financial security. A couple of hours spent keeping tabs on your finances each month can prevent years of heartache down the line.

4. Underemployment

There are different types of underemployment. A person may only be working part-time when they would ideally want to be in full-time employment. Or they may be doing a job that doesn’t make full use of their skills because they are unable to secure their ideal job. While the UK jobs market is slowly improving, many people are still underemployed and are therefore not meeting their full earning potential. This means that they may not be earning enough to cover their usual monthly bills and fall further and further into debt each month.

5. Medical Bills

Medical bills can be very costly, even if you have medical insurance. Research shows that emergency medical expenses are one of the main reasons for bankruptcy applications in the UK.

Debt can be caused by any number of things, causing misery, anxiety, and a sense of desperation. If your debts are starting to overwhelm you and you can’t see a way out, it may be time to seek credit counseling, a debt settlement arrangement, or bankruptcy. You should think about contacting a professional who can give you unbiased advice on how to improve your financial situation.

Fortunately, there is a solution for borrowers who are receiving daily phone calls and letters from frustrated payday loan lenders, in the form of payday debt consolidation. This is becoming increasingly popular in the UK, as it enables people to consolidate their debts into a single monthly repayment. Not only that, but professional negotiators can talk to lenders on your behalf and reduce the overall balance of your debts and bring down your monthly payments.

To Benefit from a Payday Loan Consolidation,

you will typically be asked to open a new savings account and pay money into it each month. There is likely to be a discussion with your payday loan consolidation company about exactly how much you can afford to deposit into this account each month.

The funds will ultimately be used as a basis for negotiating with lenders and to pay off your debts month by month. Once a month, you will make a monthly payment to your payday loan consolidation company, which will then divide the funds between the various lenders according to an agreed schedule.

Payday loan consolidation should be a serious option for consideration if you have multiple payday loans. It could save you money in the long run. And in the short term, it will lead to reduced stress and a feeling of being more in control of your finances. Finally, there will be an endpoint insight as you will be able to pinpoint the exact moment in time when you will, at last, be free from debt.