Too many Pay Day Loans

Updated: May 12

Author - Lauren Heekes


Have too many Pay Day loans and don’t know if you can afford to pay them off? Read Felix’s Story


Debt Review, Debt Counselling, Debt Management

Felix’s Story

Felix took out 5 Pay Day loans over a 3-month period. These loans each had repayment terms of 1 month. He was unable to pay the loans back as he had applied for too many and his wife had now lost her job. Along with these Pay Day Loans he had a large unsecured loan of R175,000.00 which had an installment of R6,000.00.


Debt Review, Debt Counselling, Debt Management
Don't know to pay back your Pay Day Loans
Debt Review, Debt Counselling, Debt Management

How was Felix able to get so many short-term loans?


The Pay Day loans were taken close to each other and so the financial assessments that the Credit Providers conducted did not include some of the loans he had already applied for.


Felix had applied to multiple companies in a short space of time. Almost all of them were approved. Instead of declining some of these loans, he decided to accept all of them. When his wife lost her job, he was unable to meet the contractual agreements of these loans.


What went wrong?


Felix earned R32,000.00 after deductions. His wife was unemployed and he had 3 children. His living expenses amounted to R 20,575.00. He could therefore not afford to make the installment payments each month.


His total installment for all of his debt amounted to R22,000.00 per month. He did not earn enough to repay this debt.


Send Your Questions to Negociate Credit Solutions at email contactme@negociate.co.za or get additional contact information below for facebook messenger or submit a "Call back Request"


Debt Review, Debt Counselling, Debt Management

So how did we help Felix?


1. We conducted a detailed assessment of his financial situation.

Pay Day Loans come with high interest rates. The interest charges become unmanageable when you are unable to pay the loans back. Debt Review not only reduces the interest rate, but also extends the term of the Pay Day Loans. This makes repaying this debt more affordable.


2. We provided him with the various installment options and repayment terms. i.e from 36-60 months.

If unforeseen expenses occur, the combined installments for Pay Day Loans can make it impossible to pay back on time. However, if you extend those loans over a longer repayment period the installment is reduced quite substantially. If the majority of your debt consists of Pay Day Loans then your term under Debt Review is also not as long as you would be if you only had large unsecured loans.


3. Felix chose the 36-month option.

Felix could afford the 36 month option and he was sure that he could cut back in his budget to allow for this repayment. He also had to make room in his budget for unforeseen expenses as he would no longer have access to credit while under Debt Review. He had 3 small children. Unforeseen expenses were inevitable.


4. We reduced this installment to R6,500.00 per month.

Remember that he also had a large unsecured loan of R175,000.00. This was included along with the Pay Day Loans over 36 months.

Debt Review, Debt Counselling, Debt Management
Debt Review can extend the term of your Payday Loan
Debt Review, Debt Counselling, Debt Management

This is an extremely good example of what not to do.


1. Do not apply to multiple Credit Providers for loans at the same time.

This is a recipe for disaster and can force you into all kinds of financial problems.


2. Applying to multiple Credit Providers in a short space of time is damaging to your Credit Score,

When you are granted credit, your Credit Score reduces by a few points. Your Credit Report can also be flagged for bad behaviour, it you apply for credit more than 3 times in a seven day period.


It takes 30 working days for a new loan to be listed on your Credit Report. Therefore a Credit Provider cannot conduct a proper affordability assessment if you do not mention all the loans that were granted to you within that 30 day period.


3. Don’t assume that you can repay the debt.

If you are uncertain that you can repay the debt at the time of application, rather walk away. This kind of behaviour is not only unfair to the Credit Provider who is granting the credit, but will put you in call kinds of legal situations that can destroy your future.


If you can relate to this article then give the National Credit Regulator a call and get them to put you in touch with a reputable Debt Counsellor in your area.


Send Your Questions to Negociate Credit Solutions at email contactme@negociate.co.za or get additional contact information below for facebook messenger or submit a "Call back Request"


Debt Review, Debt Counselling, Debt Management
Debt Review can be a Life Saver

There is no quick fix to getting out of debt. Make sure that you partner with a Debt Counsellor that is going to assist you to get out of Debt.


Debt Review Assessment

If you would like us to conduct a free financial assessment for you here are contact options:

If you would like us to conduct a free financial assessment for you here are contact options:

1.Complete our online assessment form at http://bit.ly/39miXXx

2. Send us an email to contactme@negociate.co.za

3. Submit your query via our FaceBook Messenger app https://bit.ly/3i3PIwl

4. Complete a call back request on our website at http://bit.ly/38Aoyuc


A consultant will contact you to discuss the way forward. Please note that you are not obligated to proceed if you feel that the solution we offer you will not assist you enough financially.


Debt Review, Debt Counselling, Debt Management

If you find this article helpful, “Like” our FaceBook page and join our FaceBook Community. Send us a question in messenger and get some free advice on how to resolve any financial issues .


Debt Review, Debt Counselling, Debt Management

About our Author

Lauren is a registered member of the National Credit Regulator. Prior to that, she worked as a Financial and Technical consultant for McGregor-BFA (Now INET-BFA). McGregor-BFA provided Trading and Market related data as well as Investment management software to Asset Managers, University Business Schools and Investment entities. Thereafter experience was advanced to the Property Market working as a Project Manager for Propertyi. But it was her career at the IEB in Adult Education that inspired a passion of hers to educate consumers about responsible ways of managing their financial lives and the long term advantages of doing so. It is her belief that financial education should be taught from an early age. By doing so we can create a country that is economically stable, driven not only by work ethics, but by becoming Financially Independent too.

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