How do I get out of payday loan debt? Find out in 5 steps

posted by in Living with debt

UPDATE: 1 July 2014 – new rules from the Financial Conduct Authority (FCA) means that payday loan companies:

  • cannot rollover an outstanding payday loan balance more than twice
  • must send the debtor an information sheet with contact details for various debt advice organisations. A copy of this information sheet can be seen here
  • cannot make more than two attempts to deduct money from a debtor’s bank account by means of Continuous Payment Authority (CPA) unless a rollover has been agreed.
  • Must now include a prominent risk warning on all financial promotions.
Payday loans neon sign

We can help you deal with payday loans

When people ask themselves “how do I get out of payday loans?” they’ll often think the answer is to pay one loan off with another. It’s not. This is an all too common problem that we see.

We know being in payday loan debt can be scary. If the repayment date looms and you can’t afford to repay, we can help. Follow these five steps to help deal with payday loans you cannot afford to pay.

Step 1: Don’t panic!

Payday loans are often advertised as a way of funding an unexpected ‘one-off expense’, like a car MOT. But the reality is four in ten people take them to pay for essentials like food and petrol – putting food on the table and getting to work.

A quarter of people take a payday loan to repay other credit. If you’re struggling with payday loan debt – don’t panic! You’re not alone. We can help you get out of debt without taking any more loans.

Step 2: Stop the borrowing cycle

The trap many people fall into is not being able to afford it in the first place, but feeling there’s no way out other than to take out another one…and another then another.

You need to stop the cycle! Constantly taking out loan after loan may seem like a fix to your problems – it’s not. By drawing a line under taking more loans you’ll stop slipping deeper into debt. You can deal with the debt that’s left by following the next steps…

Step 3: Cancel the CPA payday loan payment      

A payday loan is a non-priority debt. That means it should only be paid from money you’ve got spare once you’ve paid priorities like rent, mortgage, household bills, food and living costs. If paying back the payday loan means you’ll be short of money to pay priorities you should stop the money being taken.

When you applied for the loan you gave your card details to set up a continuous payment authority (CPA). This is how most payday loan company take the repayment.

However it’s a direct link to your bank and the payday lender can take the money whenever they want. If there’s not enough money to cover the full repayment they can try again and again.

If the money isn’t in your account you might get bank charges. So if you can’t afford it you should cancel the CPA. It’s easy to do:

  • If it’s the day the payment is due ring the bank asking them to cancel the payday loan payment
  • If it’s 1-5 days away email this template letter to the bank
  • If it’s more than 5 days away send the template letter to the bank by post
  • To keep them in the loop you should send a copy of the template letter to the payday loan company too. Do this after the bank has cancelled the CPA

Still unsure what to do? Read our article how to cancel a CPA on a payday loan. But come back here! There are still more steps to getting out of payday loans debt.

Step 4: Repay only what you can afford

One of the gripes people have over how payday lenders work is over their collection process. The truth is you cannot be made to repay more than you can afford. We can tell you how much that is and crucially we can help you prove that to the payday lender.

The easiest way to do that is to use our Debt Remedy tool.

What is Debt Remedy?

It’s our way of giving free debt advice online, to anyone who needs it. It’s a money management and debt solution tool that works out your options based on your budget. It’s quick, easy to use and you don’t have to give your name.

How do I use it?

  • You put in your income and outgoings
  • It then budgets payments like rent and bills (including arrears) to make sure the most important people and companies are being paid
  • Then it gives you a personal action plan to deal with all your debts including the next steps you need to take

Can I speak to someone?

Sure. If you’d prefer you’re welcome to ring and speak to one of our debt advisors.

Step 5: Live a life without payday loans

You’ve stopped the cycle of borrowing and retaken control. With our expert debt advice and budgeting help via Debt Remedy or on the phone you can manage your outgoings within your income, without the need to take more credit.

We can help you budget for priorities, clear any arrears, budget for future payments and then provide one of a range of debt solutions to manage your debt over the longer-term.


Very often people take payday loans because they’re desperate, but there’s a way out. By following the steps above and getting expert debt help from us you can live a life free from payday loan debt.

Tags Living with debt
  • Bill Evans

    My Daughter whilst at UN 0iversity with NO income took out a pay day on-line loan but didnt pay anything or tell anybody for six months .My wife and me have only JUST found out when we opened a letter to her by mistake. The debt has accumulated from 2,000 to 5,000 and we have only just found out. What is the best way forward?

    • moneyaware

      Hi Bill,

      Thanks for your message. I’d recommend your daughter gets in touch with us for free and impartial debt advice. We’ll be able to have a look at your her finances in more depth and discuss with her the best options for her to deal with her debt.

      Your daughter can do this using our online Debt Remedy tool, which can be found here: She’ll need to have details of her debts, income and expenditure to hand, and
      it usually takes around twenty minutes to complete.

      Alternatively she could give our helpline a call on 0800 138 1111 to speak to an advisor. It’s free to call from landlines and most
      mobiles, and is open from 8am to 8pm Monday to Friday and 8am until 4pm on Saturdays.

      I hope this helps.

      Kind regards,


      • Bill Evans

        Hello Laura,

        I will tell my daughter and hopefully she will, for once, take advise on how to proceed. This is a worry though and thats a fact.


        Bill Evans

      • Bill Evans

        Thank you for replying. Yes, I think you ARE right! My daughter has so far failed to REALISE that is KNOW she is in debt and owes money!

        I believe that what you say is perhaps a way forward, perhaps even a solution as we all appear ready to accept advise from third parties rather than mothers or fathers.

        I think my better half is TOO confrontational with my daughter so I have always tried to take a more low key even moderate approach. Only ONCE, about two years ago when she was 17, did I actually become physical with the girl- this was when she took on a GBP400 Wonga loan which my wife paid off when Wonga wrote (And we then discovered) had accumulated to GB550.

        Could you please adviseyour preferred phone number after which I will try and have my daughter call. It’s a long shot but I am more than willing to give it a try.


        Bill Evans

      • moneyaware

        Hi again Bill,

        Our phone number is 0800 138 1111 – it’s free to call from landlines and most mobiles and is open from Monday to Friday from 8am to 8pm and Saturdays from 8am to 4pm. It’s important to remember that with patience and the right advice, we will be able to help your daughter.

        If you’re finding this is affecting your relationship with your daughter or other family members, you could also have a chat with the charity Relate. You can find their contact details here:

        Kind regards,


      • Bill Evans

        Hello again Laura,

        In my last reply, I MAY have implied my daughter was the subject of a violent attack. NOTHING could be further from the truth. My two children have been brought up with the absolute minimum of physical hurt! Family relations are presently strained but a very long way from breakdown,

        My boy (18) is going through the phase of implying I should FO as he can do everything himself. Clearly he has a great deal to learn. He has turned himself around at school (The teachers have called him an inspiration to others) and is on course if he continues, to become a Chemical Engineer. He is a bit of a tight-wad and can handle money.

        At nearly 21, my daughter is reasonably well behaved but has no idea of money values or the art of saving for THAT rainy day- which ALWAYS comes. She DOES have positive values though- as of this moment I havn’t seen her for two days since she is working as a carer with BUPA at Elstree and so starts early and finishes late. Peanuts salary mind you. She really does work when asked to.

        I will try to have her phone the number you give- if I fail to get her to do this then I will advise so we don’t waste your time! Our biggest fear is that my daughter will, by default, get herself a CCJ or similar which then totally excludes her from a educational grants etc. She is young enough to harm herself for life.


        Bill Evans

      • Bill Evans

        Hello Lauta,

        Thank you taking the trouble to reply. I am afraid the situation has become worse, if that was possible.!
        We have discovered that my daughter LIED to Htachi when she took the GBP2,500 loan by saying she was working. The truth is that hse was attending Uni and so had no income. On top of that, we have had ANOTHER short loan has flopped into our letterbox this time for GBP550. I have forved her to pay GBP100 so this loan is on the way to being settled, but clearly my daughter has to be closely monitored!
        I have said to my daughter it is likely she has borrowed money from others as yet unknown. What has been a small can of worms is now a Giant–size tin of >>>>>! We do not know with any certanty quite where we stand and what MAY be coming in per post.
        For Hitachi, my daughter has paid GBP150 (Of the GBP5,500) and they have agreed with her she MUST pay this sum for the next six months after which they MAY review the situation once again. This is not satisfactory but as my daughter is saying thins like :It’s only GBP500″, she clearly has NO idea or implication of how to deal with debt.
        Any comments you have would be welcomed.


        Bill Evans

      • moneyaware

        Hi Bill,

        I’m sorry to hear the situation has become worse, and I understand this must be stressful for you too.

        From what you say, it sounds as though your daughter hasn’t yet acknowledged that she’s in debt. This is the first step to dealing with debt, and it’s not an easy step to take.

        As you are discovering your daughter has more debt than was first thought, it’s important that she gets in touch with us – details of our phone number and opening times are in my first message. Our debt advisors are professional and non-judgemental, and will be able to advise her as to the best ways to deal with the debt.

        If she’s not in a position to give us a call, she can ask us to give her a call back at a suitable time for her using this form on our website:

        If you would like to give us a call on her behalf then
        that is fine too, but we would need her to give us permission to speak to you on her behalf first.

        I hope this helps.

        Kind regards,


  • Roxanne

    I am in debt with several payday loan companies, I’m 19 and I am terrified.
    I have missed payments and I can’t afford to pay them back, I don’t get my student finance until January and my part time job isn’t enough to cover the costs. If I use Step Change, will I be Blacklisted? Will it stop me from getting a mortgage etc in the future?

    • moneyaware

      Hi Roxanne,

      Thanks for your message. It’s understandable that you’re finding your situation scary, but please try not to worry. We advise people in a similar situation to you every day and this is something you have to deal with alone.

      You won’t be blacklisted for getting in touch with us – although it’s a common misconception! There’s no ‘blacklist’ as such, but if you default on payments to your creditors, it’ll be recorded on your credit file. As lenders use this to determine whether or not they will
      lend you money, it could affect their decision if you ask to borrow money again in the future. However your credit file is a bit like a conveyor belt, and most things recorded on it will drop off after six years. I’d recommend you deal with this debt sooner rather than later, and then look to build up your credit file once you’ve cleared the debt.

      As you mention you’ve fallen behind with payments to your creditors, I’d suggest you get in touch with us for free debt
      advice. One of our advisors will have a chat with you about your financial situation, work out a budget with you and talk you through the best options for dealing with your debt. You can call our helpline on 0800 138 1111 from Monday to Friday from 8am until 8pm and Saturdays from 8am until 4pm. It’s free to call from landlines and major mobile networks, including Orange/EE, O2, Vodafone, T-Mobile, Three, Tesco Mobile and Virgin Mobile.

      I hope this helps.

      Kind regards,


    • Stoddy.

      Just to add to your frustration “No court in this country will ever imprison anyone for being in debt irrespective of the amount owing. And if you get letters from debt collection agencies giving you 7 day’s to pay or asking you to call them to make reasonable offer Or else. Do not contact them you do not have any credit agreement with any debt collection agency. write back to them telling them you have no agreement with them. burn the letters they send. if you want to make an offer make the best offer suitable to yourself that you can afford; do not over commit; if all you can afford is £1 then pay £1. and if your only a student the chances of you wanting a mortgage within the next 7 yrs which is when your credit file will be clear as the default can only stay on file for 7 yrs. fear not enjoy Uni and live your life.

  • moneyaware

    Hi Rita,

    Thanks for posting.

    Our position on this is that we wouldn’t recommend taking out credit to cover existing debt.

    However situations can vary and without knowing more information, it’d be hard to offer more specific advice.

    If you’re struggling with repayments to your loan, it’s probably best to get some impartial advice.
    As a charity, all of our advice is free and we offer a range of debt solutions.

    You might benefit from giving us a call and talking with an advisor about your situation:

    They’ll be able to take information about your debts, income and budget to help recommend a debt solution suited to you.

    I hope this helps and if you’ve got any more questions please let us know.


  • Sarah

    I currently have 3 payday loans and they are all due to go out on 28th May, Ive read about cancelling the CPA but if I dont pay it will that not get me into a much worse situation? If I do pay them Im going to have to take out more pay day loans straight away to last the rest of the month until my next pay day so im not sure what the best option is, I already have a terrible credit score so Im not to concerned about that its more about the charges i will get if i dont pay it. If I do make the payments next week on the payday loans then I wont have the money to pay off my 4 credit cards which all charge £12 each for non payments so either way im going to be worse off than I am right now even with all the pay day loans :/

    • moneyaware

      Hi Sarah,

      If you’re struggling with payday loans and can’t afford to make the payments without borrowing more money, this is often a sign that the situation could spiral out of control and become even more difficult.

      Cancelling the payments will allow you to look at what options you have to deal with the debts you already have without borrowing more money. I understand you’re concerned about the charges you could get if you don’t make the payments, but this is something that we’d be happy to discuss this with you and look at what solutions and advice are available.

      We speak to lots of people in the same situation as you and we know how difficult it can be.

      I’d recommend speaking to us as we can offer our free, impartial and confidential debt advice and solutions and we’ll also be able to talk to you about what to do next.

      All of our advice is free and based on what’s right for you, don’t feel like you have to struggle on your own.
      You can find out more about how to get in touch by visiting

      I hope this helps,


  • Stuart Manson

    I have 6 payday loans. I called my bank on Saturday to cancel the CPA on them, although I’m not sure the guy I spoke to knew what I meant. He did say he has put a stop on 4 of the companies taking money from my account, but said that since 2 of them have yet to take money from my account (first payments due at the end of this month) then he couldn’t stop them as the bank need to know what the sort code and account number the Payday Loan companies use in order to be able to block it.

    I plan on calling my bank again tonight, but do the bank need to know the payment details or should they just be able to stop the CPA?

    • moneyaware

      Hi there Stuart, thanks for posting

      The person you spoke to at the bank should have been able to cancel the remaining two continuous payment authorities. The Payment Services Regulations 2009 allows bank customers to cancel any future payments from their debit card, whether this is a single payment or a series of payments. This is regardless of time frame, and both The Financial Ombudsman and Financial Conduct Authority have recently confirmed this to be the case.

      It may be worth contacting the bank again and asking them to cancel these two remaining CPA on the basis, and mention that they’re able to do so under the act I’ve just mentioned. If they claim this is not true, just politely encourage them to check this with their manager to confirm it is correct. They should be able to cancel the remaining two CPAs without you needing to confirm sort codes and account numbers for them (business name of payday lender should be enough). Also, ask the bank staff member to make a note on their system to say that you’ve contacted the branch and asked for the card payments to be stopped. Ask them to make sure this note is visible to all other departments in the bank.

      If after talking to the bank again, they still refuse to cancel the remaining two CPAs, or the CPA amounts are taken after you asked for them to be cancelled, you should make a complaint to the bank as soon as possible.

      If the bank does not refund the payment after you make your complaint, you can then refer the case to the Financial Ombudsman Service (FOS) once the bank has made their ‘final response’. You may find it useful to speak to FOS for advice before you make your complaint.

      Hope this helps

      Kind regards


      • Stuart Manson

        Thanks, I will give this a go later today

  • daniel

    Hello everyone am here to testify how i got my loan from Mr.Daniel after i applied several times from various loan lenders who claimed to also testify right in this forum,i thought the testimonies where real and i applied but they never gave me loan. I was in need of an urgent loan to start a business and i applied from various loan lenders who promised to help but they never gave me the loan.Until a friend of mine introduce me to Mr. daniel jackson who promised to help me and indeed he did as he promised without any form of delay.I never thought there are still reliable loan lenders until i met Mr.daniel,who are indeed helped with the loan and changed my belief.I dont know if you are in any way in need of a genuine and urgent loan,free feeact Mr.daniel via his email{}

  • jo ayres

    my son seems to be addicted to pay day loans. he is currently in hospital having taken an overdose. I am helping him manage the loans but no-one seems to know how he/ we can ensure he doesn’t simply take out new loans on a day he is feeling esp vulnerable. I’m sure these companies may be generally help ful for some but i think its criminal that they do not bother to find out an details about those they lend to, their psychiatric history of ability to pay. does any one know any way forward re this?o

    • moneyaware

      Hi Jo,

      Thanks for your question – sorry to hear about the difficulties your son is facing, we wish him a speedy recovery.

      One option in these situations is for your son to add a short note (often referred to as a notice of correction) to his credit report and ask lenders to refuse any credit applications.

      The note usually means that applications for credit would be referred to an underwriter, who would then see the note. This often helps prevent impulsive behaviour and may help your sons situation.

      James Jones from Experian (one of the main credit reference agencies) explains this in more detail at

      I hope this helps, and best wishes.



    have 6 payday loans. I called my bank on Saturday to cancel the CPA
    on them, although I’m not sure the guy I spoke to knew what I meant. He
    did say he has put a stop on 4 of the companies taking money from my
    account, but said that since 2 of them have yet to take money from my
    account (first payments due at the end of this month) then he couldn’t
    stop them as the bank need to know what the sort code and account number
    the Payday Loan companies use in order to be able to block it.I
    plan on calling my bank again tonight, but do the bank need to know the
    payment details or should they just be able to stop the CP

    • moneyaware

      Hi Chadwick,

      Banks have to cancel CPAs when you ask them to, so I’d recommend getting back in touch. It may have been a mistake by the advisor you spoke with. If they still won’t cancel these CPAs then it may be worth making a complaint to the bank.

      Kind regards


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  • Jane

    Hi, I’m currently with step change, and you guys are great! However I’ve recently had to lower my monthly payments due to becoming a student, unfortunately I had to take out a pay day loan this month due to my money not being paid to me, I’ve managed to get it down but to do that I had to take a 2nd pay day loan out over a longer term 🙁 I’m just worried becuase I’m on a payment plan with yourself already and I was advices if I had to take out additional borrowing, you guys can stop helping me??? What shall I do?

    • moneyaware

      Hi Jane,

      I’d recommend giving us a call so we can work out the best way to deal with this debt.

      It’s likely that the payments on this debts won’t be affordable alongside the payments you’re currently making to us, so getting in touch will mean we can look at the best way to deal with all of your debt.

      I’m afraid I don’t know enough about your situation to say exactly what the outcome of the call will be, but I do know that our advisor will be supportive and non-judgemental.

      Here’s the contact details:

      Kind regards


  • danny Cortez

    How can I cancel a payday loan if the lender has both Credit card and bank account and routing number? is canceled as well when you call in for stop on the CPA?

    • moneyaware

      Hi Danny

      How you cancel a payday loan depends on the method they’ll use to take the payment.

      When you cancel a continuous payment authority (CPA) it means you’re withdrawing your permission for the creditor to use your card details in the future.

      You mention that they’ve also got your bank account details, if this was to set up by a Direct Debit or a standing order then they will need cancelling separately.

      There’s more information about cancelling CPAs on our website

      Hope this helps

  • Hattie Willis

    hi i read about cancelling the cpa. i do want to pay back the payday loan that i have. do i just call the lender to set up payments? what is my next step?

    • moneyaware

      Hi Hattie,

      Cancelling the CPA is the first step of dealing with an unaffordable payday loan. The next step is working out a way to repay the debt. It may be that you can repay the debt in full given a bit more time, or it could be that paying back the debt in installments is the best way.

      If you’re not sure about how to deal with the debt it might be worth getting in touch with us for debt advice. We can help you work out how to sort out this debt, and any others you may have, in an affordable way.

      Here’s more information about getting free debt advice from us:

      Kind regards


  • Roy

    Hi I’m currently in around 5000 pound of debt through payday loans. I have a good job what pays good money. I become addicted to gambling around 1 year ago. Ive currently stopped gambling now but this debt I cannot afford the payments on aswell as my other bills. I’m in a rut what seems to be getting worse.

    • moneyaware

      Hi Roy,

      Firstly, congratulations on stopping gambling. That’s the most important step, as it stops your financial situation getting worse.

      We can give you advice and support on dealing with the debt. Typically this will involve looking at your finances, making an income and expenditure budget and working out affordable options for you.

      There’s more information about how we help on our main website:

      Kind regards