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One of the problems people have with debt is that once you're in it, it can be very hard to get out.

Tackling the causes of debt: payday loans

One of the problems people have with debt is that once you're in it, it can be very hard to get out.

Just one unexpected bill, for instance if the car breaks down or if the family pet falls ill, can cause real issues for a household's finances and it is no surprise that in these difficult times, payday loans have sprung up to fill the gap in bank balances.

While there is a place for payday loans for those who need money fast but know they will be able to pay them off swiftly, for others they can make debt problems much, much worse.

Many individuals who take out payday loans end up taking out more and more debt to service the amounts they already owe to loan providers, leading to a vicious circle. It's not unheard of for people to end up owing tens of thousands of pounds on the back of a relatively small loan they were unable to pay off in full. However, there are ways people can avoid this happening to them.


Careful budgeting is always a solid starting point for anyone who is concerned about their financial situation. Get rid of any unnecessary spending and work out exactly how much money you have left over once you've paid your essential bills.

Check your bank statement carefully at the end of every month as this will give you a sense of where money is being wasted. Always keep an eye on your direct debits to make sure they are all active and cancel any you no longer use so that payments are stopped.

It can be a good idea to put some cash away every month into an account you only dip into in case of emergencies. If you're living hand to mouth every month, the chances of needing to take out a payday loan are likely to be increased.

Credit cards

Many people remain wary of spending on credit cards, and rightly so, as taking on any type of new debt has to be thought about very carefully.

But credit cards can be a way to make a monthly budget go a little bit further; and if using one can help you avoid needing a payday loan, they are well worth looking into. Of course it's vital you pay it off at the end of each month to ensure no interest is charged and the debt doesn't start to increase and become unmanageable. 

Many credit card providers offer an interest-free period which means it's possible to avoid any debt building up as long as you're able to clear your total spending on payday every month. 

Financial planning

Planning ahead can be scary for people who have financial issues, but it is a great way to avoid getting into a situation where a payday loan can start to feel like the only real way out.

By knowing exactly when your major bills are likely to come in, for example gas and electricity charges, car insurance renewals and so on, it is possible to plan ahead for these outgoings by putting some money away so they don't come as a surprise when the bills land on the doormat.

If you already have debts, try hard to stay on top of your regular payments to make sure they don't mount up any higher. You always want to make sure your total level of debt is falling, rather than rising. Some people find consolidating their debt is a good way to manage their finances as they only have to worry about one monthly payment, but this can work out more expensive in the long run, so check the amounts carefully before committing to any repayment plans.

Ask for help

If you're coming towards the end of the month and you're running out of cash fast, you need to ask for help. Most companies such as mortgage providers and energy suppliers will be open to freezing your payments short-term to help you find your feet again.

If you've explored all the options available, it might be time to ask friends or family for money. Although it is not ideal to owe a loved one cash, this can be better than taking out a payday loan as long as you're sure you will be able to pay the money back.

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