Martin Lewis, the Money Saving Expert, has weighed in on a number of concerns brought to him by members of the public. The expert offers help with questions, which has helped Britons save money, live more efficiently and solve problems. And for thousands of customers who are on a payday loan agreement, Martin’s latest advice will be particularly important.
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A payday loan is a small, short-term loan which often has high interest rates.
This type of agreement is popular as it helps tide people over during a short time of financial difficulty.
One well-known provider is Sunny, which thousands of Britons use each year for loans of between £100 and £2,500.
However, the company has announced this week that it will be going into administration, and winding down the business in its entirety.
This is likely to have implications for the thousands of people who are currently in an agreement with the loan provider.
The Money Saving Expert website has offered assistance to those who are in this situation.
The website reads: “If you have an outstanding loan, the administrators say you must carry on paying it back in the usual way. That includes if you make repayments through a debt management company.
“Your loan will continue to accrue interest until it’s repaid, and you’ll be bound by the same terms and conditions you agreed to when you took it out.
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“If you’re struggling to repay your loan, you should contact the Sunny customer service team – it still has staff, overseen by KPMG, to handle customer queries.”
Those who are having repayment problems because of the lockdown crisis may be able to arrange a payment holiday.
The UK’s watchdog, the Financial Conduct Authority, recently announced it will be extending payment holidays for credit cards and personal loans for an extra three months.
This is to provide the additional financial assistance which is often needed by many households at this particularly difficult time.
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However, the FCA has warned that those who can afford to make reduced payments should investigate doing so.
Interim chief executive, Chris Woolard, said: “Where consumers can afford to make payments, it is in their best long-term interest to do so, but for those who need help, it will be there.”
The Money Saving Expert website also highlighted there could be cause for concern for those who believe they have been mis-sold a loan.
But thankfully, there is some help at hand from Sunny’s administrators, as people can still submit a complaint.
The Money Saving Expert website reads: “KPMG says it will also invite customers to make a claim in future once it has calculated whether there is enough money to pay customers.
“If you’d already made a complaint before Sunny collapsed, it will be passed on to the administrators.”
Those who have already complained will not have to take any further action until they are contacted.
However, sadly, past payday loan company closures have shown many people do not get the full amount of their claim back in the form of a refund.
This is because there are many customers, and a limited amount of money to share between them.
A number of payday loan companies have collapsed in recent years, including QuickQuid, Peachy, Wonga and PiggyBank.
Research by Moneywise revealed over 5.4 million payday loans were taken out in the year to June 2018.
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