Can I Stop a Payday Lender Collecting Money From My Account?

Yes, it is possible to stop a payday lender from taking money from your account, even when the loan repayments are due.

Whilst lenders use a system known as continuous payment authority, which acts like a direct debit, you do have a legal right to have this stopped or cancelled at any point.

If your online payday loan repayment is coming up, but you need the funds for more pressing things, you can email, call or write to the lender to stop the upcoming payment and future repayments from happening.

However, it should be noted that your loan will still be outstanding because you signed an agreement and received the funds. Therefore, you will still be liable for any outstanding payments, late fees and interest that might accrue by not paying your loan on time.

How Do You Ask a Payday Lender To Stop Taking Payments From Your Account?

You will need to contact the lender directly (see direct lenders) if you would like your upcoming payments to be stopped. This may involve:

• An email
• A phone call
• A letter

It is essential that you include your reference number and have the debit account details at hand that you wish to stop payment from.

Having an open conversation with your lender at this point will be important because your loan will still be outstanding and you will need to discuss a repayment plan.

You may wish to ask for a payment holiday and delay payment for a month. Or you may wish to ask for smaller repayments spread over a longer period of time, known formally as an ‘arrangement to pay.’

However, it is essential to know that delaying payment or putting it off for a further date will likely incur extra fees and make your loan more expensive overall.

Why Would I Ask a Payday Lender To Stop Taking Money From My Bank Account?

There are several reasons why you may want the lender to stop taking money from your account or an upcoming repayment.

Perhaps you have experienced an emergency and need to use the funds immediately for a more pressing bill, such as groceries, rent or a household repair.

If you have recently lost your job or had a sudden loss of income, you may need to use the funds for more day-to-day purposes.

Consider Paying Off The Loan In Full

If you dislike the idea of the lender collecting money from you so regularly, you could opt to repay the loan in full. This would completely clear your debt and therefore end your loan agreement with the lender altogether.

By repaying your loan early, you also incur less interest because the loan has not been open for as long – and most payday lenders do not charge any early repayment fees.

What Additional Fees Might I Incur If I Do Not Repay My Payday Loan?

Default charge – By missing a scheduled payment, you may automatically incur a default fee of up to £15, which is the maximum according to FCA regulation. This fee may vary between lenders.

Added daily interest – For every day that the loan remains open and unpaid, it will accrue interest e.g if the loan is open for an extra 30 days, it will incur an extra 30 days of interest. With lenders charging a maximum of 0.8% per day, this can start to add up.

Credit score impact – Whilst not a financial cost, missing a repayment or not paying back a loan will be reported back on your credit report. When your score falls, it makes it harder to access mainstream credit and loans, higher credit limits and you may be presented with higher interest rates for financial products.