Andrew's been an online writer for several years. His articles often focus on personal finance.
Provident are one of the UK’s most popular doorstep lenders. But what happens if you can’t pay your Provident loan back? Will you incur any extra charges? If you can’t pay the money back, what should you do? Well, these are the questions we are going to answer today. If you find your circumstances have changed and you can no longer make your Provident payments, we will tell you what to do.
Provident offer short-term loans with minimal fuss. Someone will call at your home to give you the loan and then will call on a regular basis to pick up the payment. It is very easy to get a loan from the company, and unless you have had issues with them in the past, you should be accepted for credit. Sometimes, though, even though you may have started paying your loan off with no problem, circumstances can change. You may no longer be able to afford the repayments. So what happens next?
What Happens If You Can't Pay Provident?
One of the best things about a loan from Provident is that it is a fixed rate of interest. In other words, if you agree to a 50-week loan but take 100 weeks to pay it back, you will still be paying the same amount of interest. Although this is the case, don’t use this as a reason to not pay back on time, as you may then be refused further credit from the company. Some companies such as Wonga come in for a lot of criticism as they add on extra interest for late payments, Provident do not.
When you sign up for a loan, though, you agree to a weekly rate. This obviously varies depending on how much you borrow. The company have to check your financial situation to make sure you can afford the repayments; however, if you lose your job or find you have unexpected bills to pay, you can run into problems. But don’t panic. There are things you can do to sort the problem out. No one will show up on your doorstep demanding money or threatening to seize your possessions. So what should you do if you can’t afford your agreed weekly rate?
What to Do If You Can't Pay Your Rate
The first thing you need to do is tell your agent. Explain to them the situation and why you can not make repayments. The vast majority of agents will be more than reasonable and should try to help you. They may not be happy about the situation as it will affect their commission, but ultimately their goal is to get you back on track and paying, so they will try and help. The worst thing you can do is avoid your agent; this will annoy them and paint you in a bad light. They know when you're hiding behind the curtains!
Chances are when you start getting behind on your payments, you will receive an arrears letter. This may come through post or may be passed on by the agent. This will give you a little bit of a strong reminder that you need to start paying something. The fact is, though, that these letters are automatically sent out; they are not a threat to you in any way; it is just part of Provident company policy to send these letters out when you get yourself into arrears.
The next step is to try and negotiate a change of rate. This has to be done by one of the managers, so ask the agent if you can do this. A manager will then either ring you or call your home to discuss your change of circumstances. If you can agree to a reduced rate over a longer period, then this can solve the problem. If you pay this on a regular basis, then when you are paid up, you may still be able to get further credit.
It is important that you try and pay at least something. This shows the agent and the company that you want to pay your debt. Some people just do not care and have no intention of paying the money back; if they think you are one of these people, you will be blacklisted, and you will not be able to borrow money again, either from Provident or from other companies.
Again the main point to remember in all of this is that you need to communicate. Explain the situation and do all you can to at least pay something off your loan. But what happens if your situation is really serious and you have just no money at all?
If You Have No Money
Sometimes people’s financial situation can become very grim. If this is the case with you and you can barely make ends meet, then you may not be able to pay anything at all off your Provident loan. Again, don’t panic. Obviously, your agent will not be happy about the situation, but they will offer to help you. If you have no money at all and simply can’t pay anything, then Provident move the debt on. Your debt will stay with Provident for 13 weeks since your last payment, then it gets sold on to a new company.
When this happens, you will be contacted by the company who have bought your debt, and they will arrange for you to make payments. Instead of paying a very high rate, it will be reduced right down to what you can afford, even if that’s only £1 a week. This is something that does happen quite often with Provident customers, and as long as you cooperate and communicate, you should have nothing to worry about.
Obviously, if the worst does happen, then you may have issues being able to borrow money from the company again. But if they can see you are doing everything you can to make at least some payment, then they may still be able to offer you further credit in the future when your circumstances improve.
The fact is that debt is a very unpleasant thing, and no one wants to be in that situation. But if you have borrowed money from Provident and can’t pay the money back, then the key is to not panic. There are ways around the problem, and you should be able to come to some agreement with the company. Provident do sometimes come in for some bad press, but overall they are very reliable and have been offering doorstep loans for many years; hence you need not worry too much if you are having problems.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.
Reilly Jenkins-Jones. on March 16, 2019:
Does any one know if Provident loans have an insurance cover incase you lose your job or get into difficulty paying. If so will it pay off the remaining debt??
Shez on January 17, 2017:
Thanks great article
MrAngry on June 12, 2013:
Sending an arrears notice is NOT provident policy. Its required under the consumer credit act and if its not sent the lender (provident in this case) are not allowed to enforce the agreement.
kev on March 20, 2013:
well written article
OLDNAVY on January 27, 2012: