As a homeowner and someone with a good job Abi may not be the first person that comes to mind when we think about payday loans.

But the office worker became suicidal when she could not keep up with her payments.

Her story shows that all it takes is a change in circumstances to fall into a downward spiral of debt.

In 2016, Abi was earning between £25,000 and £30,000 doing agency work as a PA.

She owns her Croydon house and had never fallen behind on her payments before.

When she had a couple of weeks break from work she took out an £800 payday loan, safe in the knowledge she could pay it back when she got another contract. She had never struggled to get regular work before.

But she fell ill, meaning that she could not make the payment before the 30-day limit when the massive 1429% annual interest started to be added on.

Unfortunately she had to take more time off work than expected and the debts started to rack up.

The 52-year-old fell behind on her mortgage repayments and in a bid to keep up she took out another £800 payday loan.

It was the same time that Universal Credit, the means tested benefit, was rolled out in Croydon as one of the pilot boroughs.

It was introduced by the Department for Work and Pensions and rolls six benefits into one which are paid monthly with a six-week wait for the first one.

But when it was first introduced in Croydon there were delays of up to 13 weeks leaving some including Abi, in critical situations.

“I did the research and tried to find the one that had the lowest APR never thinking I would be in the situation where I missed a payment,” she remembers.

“I had gone to universal credit and every single safety net was removed.

“If my mortgage support had kicked in I wouldn’t be in this situation.”

‘There were times I couldn’t even speak’

She said things got really bad when a court letter landed on her doorstep.

Due to her mortgage arrears she was called to a possession hearing.

“I felt suicidal,” said Abi as she remembers this moment.

But it on this letter that she first heard of the South West London Law Centre (SWLLC), which has a branch in Croydon, and started to get extra help with her spiralling debts.

She adds: “If it wasn’t for the team at the law centre and my GP I would have killed myself.

“It was such a traumatic experience, there were times I couldn’t even speak.

“I ended up having to use the food bank, I never thought I’d end up having to use one and I was so scared to go.”

Her first possessions hearing was adjourned but at the second, the judge told her to pay back, £50 a month for the next five years, equivalent to £13,000.

Next month (June) she has a Personal Independence Payment (PIP) appeal – 18 months after she applied for it.

She is confident she will get a backdated payment which will help to clear some of the debts.

Figures from the Financial Conduct Authority (FCA) show that in 2018 Croydon had largest payday loans per capita.

A massive, 42,639 payday loans were handed out in the year totalling £11,811,613.

This works out at £29.15 for every person living in the borough and includes £7,677,548 of fees and interest.

Debt team manager at Croydon’s SWLLC Roni Marsh said she is not surprised that Croydon topped the list.

“Croydon is a fabulous place but we have a lot of deprivation,” she said.

“If you type into Google about needing money and needing extra help not only do you get internet providers you get places you can go into in Croydon and get a loan face to face.

“I would advise people considering a payday loan contacting their local debt service.

“Unless this is a one off thing there will usually be underlying problems.

“The law centre is a charity and regulated advice service. We get down to the nitty gritty and work out what is the underlying problem.

“Something has always triggered them to seek advice so we work out what that is and whether they are getting the maximum amount of money they are entitled to.”

For Abi, she says she will never use a payday loan again adding that even the word makes her feel sick now.

But she does not blame people who turn to the high interest loans when they feel there is no other option.

“I think people do think about these loans but you can’t blame them – You have to blame all the other safety nets failing,” said the 52-year-old

“I would say don’t go for a payday loan, but what else can they do?

“At the time I didn’t think about my other options but everybody should be warned against it – your circumstances can change so quickly.”

Now Abi is back working and slowly getting back on track financially but she does not think she will ever get to where she was before.

If you are having trouble paying your rent you can apply to Croydon Council for discretionary housing payments which comes from a central government fund.

In Croydon 93% of applications are accepted.  

A council spokesman said: “Homelessness brings significant personal costs for families and financial costs for the councils that look after them, and as little as £1,500 over three months and ongoing support can prevent it from happening for eligible people in real need.

“That is why, in the last two years alone, the council has helped 3,471 local Croydon families with discretionary housing payments, including an extra £1.7m of our own for 1,100 households on top of Government funding.”

An alternative to online and high street payday loans company are credit unions.

Last year the Croydon Plus Credit Union was given a £70,000 grant from Lloyds Banking Group.

A credit union is a community of savings and loans – for this one its members must live or work in Croydon, Merton or Sutton.

Croydon Plus operates as a community bank and offers members competitive interest rates as a safe and cost-effective alternative to payday loan companies.  

If you are struggling with debt there is advice on the Croydon Council website: https://www.croydon.gov.uk/advice/your-money-2

You can also visit the South West London Law Centre website at http://www.swllc.org/ or call 020 8767 2777