I used payday loans to pay bills after getting into £14k debt – the shame was crushing but I found a way out

Resourcing analyst Matt Skeen racked up thousands in debt after relying on payday loans to make ends meet. 

It all started when the 32-year-old was working as a barista for a coffee shop chain and struggled to make ends meet on his flexible hours and pay.

“Because of the nature of the job, my working hours were variable,” he explained.

“This made it very difficult to budget and manage my expenditure based on income as I was never earning the same.”

He first turned to credit when he moved into a rental flat, taking out a bank loan to support himself.

But, once his flatmate left and his costs doubled, things quickly spiralled.

“The expenditure went up vastly,” he said, and it was at that point he started using payday loans. “I was using payday loans for everything and anything, including bills and food.”

He started small with loans that seemed affordable at first, “but as loyalty built, they were offering me higher amounts,” he said.

“Because of the interest on them, it led to difficulties keeping up with my household bills. I was left with rent arrears, and arrears on my utilities.”

Things came to a head when Matt, from Newcastle, realised he was £14,000 in debt, spread across utility and rent arrears, payday loans and other forms of unsecured credit.

“It had a major impact on my finances as I had two CCJs issued by two creditors, which will stick on my credit score for a while.”

The long-term impact of debt

It’s this long-term impact that can really take its toll, and as payday loan use is becoming more widespread, an increasing number of Brits could be sucked into the cycle. 

Research from Moneyhub shows that, in the last six months, more people have applied for payday loans than mortgages, highlighting the extent of consumers’ money troubles.

Yet, the irony is that by turning to payday loans it can be harder to be accepted for the likes of mortgages and credit cards in the future. 

This is something that Matt knows all-too well.

“I have only just managed to get myself into a position where my credit score is presenting as ‘good’,” he said. 

“It has had an impact on me getting jobs in certain industries, because they can’t employ people with CCJs, and it has impacted myself and my fiancée when we have been looking at new properties to move to as a lot of landlords want clear slates of credit, and I’m seen as a high risk.”

It isn’t just the financial consequences that Matt wants to warn people about either. For many struggling with debt, the emotional impact can be just as bad.

“There was the anxiety of paying back the debt, the panic that bailiffs could be knocking on the door,” he recalls.

“But also a feeling of shame as I felt alone in the situation, because I was afraid that my family would be disappointed or angry with me.”

This feeling of shame is not uncommon among those who face unmanageable debt. Dr Daniel Glazer, Clinical Psychologist and co-founder of health technology platform UK Therapy Rooms, explains how isolating it can be.

“There is still a pervasive stigma that being in debt represents some kind of personal failing,” he said.

“It’s easy to withdraw from family and friends out of embarrassment, putting up a facade that everything is ‘just fine’.

“But pretending only severs support connections and allows shame to intensify in a vicious, lonely cycle. Vulnerably opening up requires courage, yet can be the first step toward breaking this pattern.”

Opening up and clearing the debt

This was the turning point for Matt. “It took a lot of time but I built the courage to speak to my partner and family,” he said.

“I was open and honest about the debts. For me, the constant fear and anxiety got to the stage that it was having an impact on the people around me as I was constantly afraid of what could happen.

“I looked for help, and got in contact with StepChange, who assisted me with a budget and a plan of how I could clear the debt.” 

This kind of proactive approach – budgeting, planning and really zeroing in on how to solve the problem – can be one of the best ways to break the cycle and start getting into a healthier money mindset. For Matt, it made all the difference. 

For those who still need to resort to credit every now and then, there are some alternatives to payday loans that are far less risky. Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, has this advice:

“Payday loans should only ever be used in an emergency when consumers have no other means to borrow a small sum in the short term.

“It would be cheaper to use a credit card, or even to dip into the red on an overdraft. However, borrowers must strive to pay back any debts as soon as they can.

“A credit repair card is handy for those with a poor credit score or indeed a lack of credit history, [as] providers only allow customers to borrow small amounts. Due to the interest charges on these types of cards, it incentivises users to pay back their debt each month to avoid incurring interest.

“An unsecured personal loan is a good choice for anyone looking to consolidate their debts, such as if they have credit cards incurring high levels of interest every month.

“Consumers struggling to keep up with essential payments or [who] fall into a debt spiral would be wise to seek advice from a debt advice agency and of course, discuss any impending payments with their provider.

“As an example, some mortgage holders could take a payment holiday and customers could speak to their bank to see if they can get an account with an interest-free buffer on an overdraft.”