Case Study – Mike
Mike (50) first came to PayPlan in 2012 with £17,000 of debt.
Mike needed to carry out some urgent maintenance on the property where he lived.
He didn’t have any savings so he turned to multiple payday loan providers to source the money.
Mike owned his own home and was employed as a teacher which allowed him a regular wage to repay what he had borrowed. However, while the repairs we taking place Mike’s boiler was condemned as unsafe and needed to be replaced immediately. This put a further strain on his household finances and had to borrow more.
Payday loans are short-term cash loans, normally paid back within one month. Due the short period over which the money is borrowed the interest rates are very high and if you don’t pay back in the agreed period additional interest and charges are added to the original sum borrowed .
The high interest rates being charged on top of the payday loans caught up with Mike. He admits they caught him off guard and was naïve to how much he would be paying back.
He said: ‘Within a matter of months it just snowballed and got out of control!’
Mike had previously been a client of PayPlan during 1994. When he graduated he got into issues with student loans and his previous experience then led him to contacting us again.
Talking to PayPlan’s debt advisers, and due to his circumstances, Mike was recommended a Debt Management Plan (DMP).
He said: ‘I’ve been with you 5 years now and you’ve [PayPlan] been absolutely brilliant. It’s thanks to PayPlan I can finally sleep at night’
He has just has an annual review and is currently paying £125 back each month. For Mike this is affordable and sustainable. If things continue the way they are going, Mike will be debt free in about 5 years’ time.
We wish Mike the best of luck in his repayment plan!
If you, or someone you know could be in a similar situation to Mike, then get in touch with one of our trained advisers today on 0800 716 239 or use our Debt Help Form to get help online.