Payday Loan Compensation or in other words, a refund on a payday loan is the most often requested refund by the customers. Some companies which will deal with payday loan have already refunded to those clients whose loans seemed to be unaffordable but then what is an unaffordable loan and when can you file for a claim?
Are you able to repay your loan without any ‘undue difficulty’?
The central point is whether you are capable to repay the loan taken without causing any undue difficulty or in simpler terms, whether you can repay the loan without taking another loan to repay the previous one. Now you can evaluate yourself. Will you be able to do that? Will it affect your family? If the answer is no, then you can file for Payday Loan Compensation.
Are you facing unfair treatment?
Just because you are the borrower it does not mean that you can treat unfairly by the lender and by unfairly I mean is not informing you of free debt services like Citizen Advice or the Money Advice to help you manage your finances better and repay the loan. Also, the payday loan lenders are not allowed to provide you with more loans to cover off the previous one. There is a limit to one’s greed.
Are you confused regarding how much you should ask for compensation?
According to the rule, you should get a refund on the interest you paid and the extra-statutory interest of 8%. Also, you should request for the waiving off the ‘unaffordable’ loans from your credit record and request them to cancel any of your remaining balance in your credit records.
In case you have paid off the loan, then do not lose hope because you can still file for a refund provided you file the case within the period of six years of taking out the loan.
How will you get your dues?
Keep a record of the exact amount you took the lender and the repayments you have done so far. This step is necessary to smoothen out the process. Next, you will have to write to the lender and if the lender denies you your rightful compensation then you can file the case with Financial Ombudsman Service after the period of eight weeks after you filed for compensation with your lender.
Payday loans are some of the most controversial loans because of the high expense and interest rates involved but during the festive season when people would like to gift something special for their dear and near ones, they fall in the trap of such lenders and this trap becomes a vicious cycle.
But since January 2015, several rules were implemented on this payday loan industry and because of these several restrictions, the loans now seem cheaper and that has made them more alluring. Financial Conduct Authority is the head supervisor or all financial services and it is an independent body that is paid by its members.
