Rinalds Uzkalns

The idea behind a payday loan is that you take it for an emergency when you need to pay something unexpected before you will have the money to do so. It is always the idea to know how you are going to pay the loan back when it is due and to stick to this plan. Payday loans are not a good option when you are looking to pay essentials such as household bills, mortgage or rent or to pay off other debts. So what can you do if you need money for these things other than taking a payday loan?

Food and other essentials

If you find that you don’t have enough money for food, send the kids to school, or go to work then the first step is to contact everyone you owe money to and see if you can come to an arrangement. Lots of companies will agree to a lower payment for a time to get yourself sorted and this will free up the money you need.

If you are working, see if your employers can give you an advance on your wage to get the essentials but remember – this means you will have less money come payday so budget for this. You can also ask Jobcentre Plus for a short-term advance if you are claiming benefits and the money is either late or it is your first payment.

Speak to friends and family to see if you can borrow some money then arrange a repayment schedule that you can stick to without causing you more problems.

Rent or mortgage

This is another essential area as without organising payment of your rent or mortgage, you could lose your home. As soon as you realise you are having problems, contact your landlord or mortgage company. Lenders for mortgages have to give you fair treatment and consideration and enough time to sort the repayments. Often they will freeze interest during this period and agree not to add further charges. A debt advisor can help you understand your rights in this area.

Utility bills

Utility bills such as gas and electric are one of those areas counted as an essential bill when you speak to a debt advisor. They are the things that you cannot live without – you need to cook, keep warm and look after yourself and all of these need gas or electric or both.

If you find you cannot pay your bill, don’t take out a payday loan because this won’t solve the problem. Contact your energy supplier and let them know you are having troubles. If you are behind on your payments, suppliers will give you a fair hearing and allow you to pay at a rate you can afford. If you are unsure how much to suggest, speak to a debt advisor first. You can also call the Home Heat Helpline on 0800336699 for advice.

Credits cards or loans

If you know you aren’t going to manage to make these payments without leaving yourself short for essential bills, then work out a budget to see what you can afford to pay. You can then approach your lender with all of this information to see if a reduced payment can be organised.

Know your rights too. If you can’t pay back a loan or credit card, the lender should give you a reasonable period of time to repay the debt and should treat you fairly and considerately. Many will freeze interest during this period so the debt doesn’t continue to increase.

Clothes or items for the home

Firstly, be harsh with yourself – do you absolutely need the item now or can you wait until your next payday to get it? If you take out a payday loan, you will end up paying much more for the item so even if it is on sale, for example, you will lose the benefit of the sale price by the extra interest you pay on the money.

If it is an item you need, examine other options before taking a loan. Can you get the item from a second hand outlet like Freecycle? There are scores of perfectly useable items on these types of website that all they cost is the fuel or bus fare to collect them. If you are on an income-based benefit and the item is an emergency like a cooker contact your local council who may have schemes that can help.

Payday Loan

If you have a payday loan and take another out because you realise you can’t pay it, this is possibly the worst thing you can do. Before even considering this, speak to a debt advisor to help you organise your finances and find a way around it. Also, get in touch with the payday loan lender and let them know you are having trouble. They have the same obligations about how to treat you as a credit card lender or mortgage company.

Remember to stop the Continuous Payment Authority (CPA) that is set up with the lender when you take the loan, otherwise they could take their money and leave you without money for essentials. Always let the lender know you have done this too.

The lender pay suggest rolling over the loan but avoid this. It is effectively the same as taking out a second loan with a new term and fresh interest and doesn’t solve the underlying problem. If you do take this option, remember a lender can only roll over a loan twice.


Remember no matter how bad your credit rating is, there are always other options apart from a payday loan. Check out lenders who specialise in those with poor credit ratings for loans and credit cards or see if your bank can look at an authorised overdraft.