Understanding Payday Loan Addiction

Understanding Payday Loan Addiction:

The UK is home to millions of payday loan borrowers. Most of these borrowers take out payday loans among other types of short-term loans occasionally. For some, these types of loans supplement income due to the rising cost of living coupled with stagnant wages. While most payday loan borrowers take out the loans to take care of budget upsets such as unexpected expenses, there are those that simply take payday loans because they are available to them. Finally, there are those who can’t live without payday loans for no apparent reason.

If you find yourself in challenging financial situations on a regular basis, you may have a problem. Overdependence on short-term loans is dangerous. You can end up in a debt spiral or damage your finances severely. However, most people don’t realize they have a problem until it’s too late so, how do you know you are addicted to payday loans?

Spotting a payday loan addiction

Taking out a short-term loan several times every year doesn’t mean you are dependent on short term loans. It may mean you need to readjust your budget or perhaps you just need to reduce your bills. However, when you can’t live without a payday loan or payday loans every month, you have a serious problem especially if you take out payday loans to pay household bills. Your underlying financial problem/s could be anything from massive overspending to misappropriation of funds. You must tighten your budget and financial discipline to take care of such problems. Reducing your expenses on a monthly basis is an effective way of living debt-free.

If you are taking out payday loans to cater to your wants such as; a new Smartphone, to pay for a holiday, etc., you are in the early stages of payday loan addiction. Payday loans are meant for emergency cash needs only such as; paying for unexpected hospital bills, car repairs, etc. A new Smartphone isn’t a pressing need but a want especially when you have another Smartphone. The same applies to holiday trips among other things you can’t afford to pay out of your regular budget or savings. The problem with taking short term loans to fund wants is; you use the loans more and more on things you can’t afford and in most instances, you get into trouble when repaying.

The worst sign of a payday loan addiction is taking out a payday loan to pay off another payday loan. Debt spirals start this way. When this happens regularly, and you find yourself with multiple loans every month, you have a payday loan addiction. Getting out of such a situation is difficult without conscious effort. Like typical addictions, the problem is likely to get worse with time, i.e., the amount of money you owe is likely to increase over time. This is the ultimate form of payday loan addiction. 

Payday loan addiction remedies

If you spot a payday loan addiction, it’s time to take action. As mentioned above, the best and fastest solution is to readjust your budget. Overspending is a serious problem. You can reduce overdependence on loans if you purpose to spend less than you earn. This might take some drastic budget changes. If you don’t have a budget, you need one immediately. A budget doesn’t need to be complicated. All you need is to ensure all your expenses are less than your income every month. If you are dependent on short term loans, your expenses are most likely more than your income. You need to identify areas where you overspend consistently, or your debt problems will get worse. Most importantly, it is time to stop borrowing. 

Like all forms of addiction, getting out of a short-term loan addiction on your own may be challenging. If you have trouble reorganizing your budget/finances, you can always seek professional help. The UK has many free debt advice organizations that are ready to help, but you must take the first step and accept you have a debt problem. 

Remember: Payday loans are useful in emergency situations only. Like any drug, it is easy to get addicted to payday loans. The potential to misuse them is very high since they are readily available to anyone with a paycheck or a regular source of income. Furthermore, you can secure payday loans regardless of your credit history.

Mark Scott

Is the Company Director of Swift Money Limited. He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.